DENVER, May 10, 2021 /PRNewswire/ -- Akerna (Nasdaq:
KERN), an enterprise software, leading compliance technology
provider and developer of the cannabis industry's first
seed-to-sale enterprise resource planning (ERP) software technology
(MJ Platform®), today reported its unaudited financial results for
the quarter ended March 31, 2021.
"Our first quarter was a strong start to 2021, with increasing
demand for our platform driving 62% year over year software
growth," said Jessica Billingsley,
CEO of Akerna. "With the leadership position we have in our
core business and capabilities we have integrated to take advantage
of new opportunities such as payments with the passage of the Safe
Banking Act, new state initiatives, and ultimately U.S. federal
legalization, we believe we are well positioned to capitalize on
the approaching inflection point in industry growth."
Akerna is the technology ecosystem for cannabis. Through its
family of software, which includes MJ Platform, Viridian Sciences,
Ample Organics, Trellis, Leaf Data Systems, Last Call Analytics,
and solo sciences, Akerna provides the only scalable cannabis ERP
solution offering compliance, data, taxation, payments,
seed-to-sale, track-and-trace, and consulting to operators,
governments, and brands. In doing so, Akerna creates one of the
world's most transparent and accountable consumer packaged goods
supply chains on a global scale.
Cannabis companies looking to scale alongside the rapidly
expanding industry must leverage the right tools, and enterprise
class software is essential to do so.
First Quarter 2021 Financial Highlights
- Software revenue was $3.8
million, up 62% year over year
- Total revenue was $4.0 million,
up 31% year over year
- Gross profit was $2.6 million, up
53% year over year
- Net loss was $6.3 million
compared to a net loss of $4.8
million in the same period last year
- Adjusted EBITDA was negative $1.8
million compared to negative Adjusted EBITDA of $3.2 million for the same quarter
- Cash was $15.4 million as of
March 31, 2021, compared to
$17.8 million as of December 31, 2020
See "Explanation of Non-GAAP Financial Measures" below
First Quarter 2021 Key Metrics
- Total SaaS ARR of $15.7 million,
up 73% year over year
- Average new MJ Platform order up 29% year over year
- MJ Platform transaction volume up 51% year over year
- Retail order volume up 51% year over year
- Retail order value up 29% year over year
- New Bookings ARR of approximately $1M
First Quarter 2021 Operational Highlights
- Akerna's MJ Platform achieves SAP certified integration with
SAP NetWeaver
- Announced acquisition of Viridian Sciences, SAP Business One
software for cannabis, with positive cash flow contribution
- Nominated new board member, Barry
Fishman
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 tomorrow, Tuesday, May 11, 2021, 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: 1-877-407-3982
Toll / International: +1-201-493-6780
Conference ID: 13719091
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 $20 billion in cannabis sales to
date and is the first cannabis software company listed on Nasdaq.
The company's cornerstone technology, MJ Platform, the world's
leading 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 that are
required to be expensed as incurred in accordance with GAAP,
because business combination 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
- Costs incurred in connection with debt issuance when we elect
the fair value option to account for the debt instrument because if
we had not elected the fair value option such costs would be
recognized as an adjustment to the effective interest and excluded
from EBITDA
- Restructuring costs because we believe these costs are not
representative of operating performance;
- Equity in earnings (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; and
- Other non-operating expenses which includes a one-time gain on
asset sale, 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 March 31, 2021 are
presented in the tables below. For comparative purposes, the
reconciliation of these non-GAAP financial measures in the prior
quarter ended December 31, 2020 are
contained in our press release for that quarter dated March 22, 2021 and available on our website at
www.akerna.com or in our current report on Form 8-K filed with the
Securities and Exchange Commission on March
22, 2021 and available here:
https://www.sec.gov/Archives/edgar/data/1755953/000121390021016988/ea138212ex99-1_akerna.htm
Akerna
Corp.
|
Condensed
Consolidated Balance Sheets
|
|
|
March
31,
|
|
|
December
31,
|
|
|
2021
|
|
|
2020
|
|
Assets
|
(unaudited)
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash
|
$
|
15,426,759
|
|
|
$
|
17,840,640
|
|
Restricted
cash
|
|
500,000
|
|
|
|
500,000
|
|
Accounts receivable,
net
|
|
1,887,093
|
|
|
|
1,753,547
|
|
Prepaid expenses and
other current assets
|
|
2,095,614
|
|
|
|
2,458,727
|
|
Total current
assets
|
|
19,909,466
|
|
|
|
22,552,914
|
|
|
|
|
|
|
|
|
|
Fixed assets,
net
|
|
1,139,689
|
|
|
|
1,193,433
|
|
Investment,
net
|
|
229,883
|
|
|
|
233,664
|
|
Capitalized software, net
|
|
4,201,065
|
|
|
|
3,925,739
|
|
Intangible assets,
net
|
|
6,974,546
|
|
|
|
7,388,795
|
|
Goodwill
|
|
41,874,527
|
|
|
|
41,874,527
|
|
Total
Assets
|
$
|
74,329,176
|
|
|
$
|
77,169,072
|
|
|
|
|
|
|
|
|
|
Liabilities and
Equity
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
|
Accounts payable,
accrued expenses and other accrued liabilities
|
$
|
3,060,746
|
|
|
$
|
3,188,576
|
|
Deferred
revenue
|
|
1,105,869
|
|
|
|
843,900
|
|
Current portion of
long-term debt
|
|
8,781,302
|
|
|
|
11,707,363
|
|
Total current
liabilities
|
|
12,947,917
|
|
|
|
15,739,839
|
|
|
|
|
|
|
|
|
|
Long-term debt, less
current portion
|
|
1,127,843
|
|
|
|
3,895,237
|
|
Total
liabilities
|
|
14,075,760
|
|
|
|
19,635,076
|
|
|
|
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
Equity:
|
|
|
|
|
|
|
|
Preferred stock, par
value $0.0001; 5,000,000 shares authorized, none are issued and
outstanding at March 31, 2021 and December 31, 2020
|
|
—
|
|
|
|
—
|
|
Special voting
preferred stock, par value $0.0001; 1 share authorized, issued and
outstanding as of March 31, 2021 and December 31, 2020, with $1.00
preference in liquidation; exchangeable shares, no par value,
1,647,287 and 2,667,349 shares issued and outstanding as of March
31, 2021 and December 31, 2020, respectively (See Note
4)
|
|
12,601,744
|
|
|
|
20,405,219
|
|
Common stock, par
value $0.0001; 75,000,000 shares authorized, 23,067,517 and
19,901,248 issued and outstanding at March 31, 2021 and
December 31, 2020, respectively
|
|
2,306
|
|
|
|
1,990
|
|
Additional paid-in
capital
|
|
111,908,399
|
|
|
|
95,090,883
|
|
Accumulated other
comprehensive loss
|
|
(104,727)
|
|
|
|
(91,497)
|
|
Accumulated
deficit
|
|
(64,154,306)
|
|
|
|
(57,872,599)
|
|
Total
equity
|
$
|
60,253,416
|
|
|
$
|
57,533,996
|
|
Total liabilities and
equity
|
$
|
74,329,176
|
|
|
$
|
77,169,072
|
|
Akerna
Corp.
|
Condensed
Consolidated Statements of Operations
|
(unaudited)
|
|
|
|
For the Three Months
Ended
|
|
|
|
March
31,
|
|
|
|
2021
|
|
|
2020
|
|
Revenues
|
|
|
|
|
|
|
Software
|
|
$
|
3,795,153
|
|
|
$
|
2,346,310
|
|
Consulting
|
|
|
172,747
|
|
|
|
692,584
|
|
Other
|
|
|
46,124
|
|
|
|
31,652
|
|
Total
revenues
|
|
|
4,014,024
|
|
|
|
3,070,546
|
|
Cost of
revenues
|
|
|
1,454,167
|
|
|
|
1,396,219
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
|
2,559,857
|
|
|
|
1,674,327
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
Product
development
|
|
|
1,424,100
|
|
|
|
874,787
|
|
Sales and
marketing
|
|
|
1,735,915
|
|
|
|
2,040,751
|
|
General and
administrative
|
|
|
1,852,962
|
|
|
|
3,457,262
|
|
Depreciation and
amortization
|
|
|
1,052,883
|
|
|
|
180,229
|
|
Total operating
expenses
|
|
|
6,065,860
|
|
|
|
6,553,029
|
|
|
|
|
|
|
|
|
|
|
Loss from
operations
|
|
|
(3,506,003)
|
|
|
|
(4,878,702)
|
|
|
|
|
|
|
|
|
|
|
Other (expense)
income:
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
|
(776,181)
|
|
|
|
—
|
|
Interest
income
|
|
|
1,801
|
|
|
|
33,522
|
|
Change in fair value
of convertible notes
|
|
|
(1,991,272)
|
|
|
|
—
|
|
Other expense,
net
|
|
|
—
|
|
|
|
(124)
|
|
Total other (expense)
income
|
|
|
(2,765,652)
|
|
|
|
33,398
|
|
|
|
|
|
|
|
|
|
|
Net loss before
income taxes and equity in losses of investee
|
|
|
(6,271,655)
|
|
|
|
(4,845,304)
|
|
Income tax
expense
|
|
|
(6,270)
|
|
|
|
—
|
|
Equity in losses of
investee
|
|
|
(3,782)
|
|
|
|
—
|
|
Net loss
|
|
|
(6,281,707)
|
|
|
|
(4,845,304)
|
|
Net loss
attributable to noncontrolling interest in consolidated
subsidiary
|
|
|
—
|
|
|
|
101,175
|
|
Net loss attributable
to Akerna shareholders
|
|
$
|
(6,281,707)
|
|
|
$
|
(4,744,129)
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted
weighted average common stock outstanding
|
|
|
22,209,072
|
|
|
|
12,469,737
|
|
Basic and diluted net
loss per common share
|
|
$
|
(0.28)
|
|
|
$
|
(0.38)
|
|
Akerna
Corp.
|
Condensed
Consolidated Statements of Cash Flows
|
(unaudited)
|
|
|
For the Three
Months Ended
|
|
|
March
31,
|
|
|
2021
|
|
|
2020
|
|
Cash flows from
operating activities
|
|
|
|
|
|
Net loss
|
$
|
(6,281,707)
|
|
|
$
|
(4,845,304)
|
|
Adjustment to
reconcile net loss to net cash used in operating
activities:
|
|
|
|
|
|
|
|
Equity in losses of
investment
|
|
3,782
|
|
|
|
—
|
|
Bad debt
|
|
(10,516)
|
|
|
|
208,729
|
|
Stock-based
compensation expense
|
|
503,379
|
|
|
|
301,948
|
|
Amortization of
deferred contract cost
|
|
118,519
|
|
|
|
—
|
|
Non-cash interest
expense
|
|
769,773
|
|
|
|
—
|
|
Depreciation and
amortization
|
|
1,052,882
|
|
|
|
2,824
|
|
Foreign currency
loss
|
|
(18,801)
|
|
|
|
—
|
|
Change in fair value
of convertible notes
|
|
1,991,272
|
|
|
|
—
|
|
Change in fair value
of contingent consideration
|
|
—
|
|
|
|
—
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
|
Accounts receivable
|
|
(177,832)
|
|
|
|
234,203
|
|
Prepaid expenses and other current assets
|
|
236,339
|
|
|
|
(631,319)
|
|
Other
assets
|
|
—
|
|
|
|
(58,925)
|
|
Accounts payable and accrued liabilities
|
|
152,455
|
|
|
|
975,312
|
|
Deferred revenue
|
|
286,637
|
|
|
|
(101,237)
|
|
Net cash used
in operating activities
|
|
(1,373,818)
|
|
|
|
(3,913,769)
|
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities
|
|
|
|
|
|
|
|
Developed software
additions
|
|
(704,637)
|
|
|
|
—
|
|
Furniture, fixtures,
and equipment additions
|
|
—
|
|
|
|
(53,621)
|
|
Cash paid for
business combination, net of cash acquired
|
|
—
|
|
|
|
101,340
|
|
Net cash used
in investing activities
|
|
(704,637)
|
|
|
|
47,719
|
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities
|
|
|
|
|
|
|
|
Value of shares
withheld for related to tax withholdings
|
|
(333,847)
|
|
|
|
—
|
|
Net cash (used
in) provided by financing activities
|
|
(333,847)
|
|
|
|
—
|
|
Effect of
exchange rate changes on cash and restricted cash
|
|
(1,579)
|
|
|
|
—
|
|
Net change in cash
and restricted cash
|
|
(2,413,881)
|
|
|
|
(3,866,050)
|
|
Cash and restricted
cash - beginning of period
|
|
18,340,640
|
|
|
|
19,280,897
|
|
Cash and restricted
cash - end of period
|
$
|
15,926,759
|
|
|
$
|
15,414,847
|
|
Cash paid for
interest
|
|
—
|
|
|
|
—
|
|
Cash paid for
taxes
|
|
—
|
|
|
|
—
|
|
Supplemental
Disclosure of non-cash investing and financing activity:
|
|
|
|
|
|
|
|
Settlement of
convertible notes in common stock
|
|
8,467,292
|
|
|
|
—
|
|
Conversion of
exchangeable shares to common stock
|
|
7,803,475
|
|
|
|
—
|
|
Settlement of other
liabilities in common stock
|
|
377,325
|
|
|
|
—
|
|
Akerna
Corp.
|
Earnings Before
Interest, Taxes, Depreciation and Amortization, and Adjusted
EBITDA
|
The reconciliation of
net loss to EBITDA and Adjusted EBITDA is as follows:
|
(unaudited)
|
|
|
|
Three Months Ended
March 31,
|
|
|
2021
|
|
2020
|
|
|
|
|
|
Net loss
|
|
$
(6,281,707)
|
|
$
(4,845,305)
|
Interest
income
|
|
(1,801)
|
|
(33,522)
|
Interest
expense
|
|
776,181
|
|
-
|
Change in fair value
of convertible notes
|
|
1,991,272
|
|
-
|
Depreciation and
amortization
|
|
1,052,883
|
|
180,229
|
Income tax
expense
|
|
6,270
|
|
-
|
EBITDA
|
|
$
(2,456,902)
|
|
$
(4,698,598)
|
|
|
|
|
|
Stock
compensation
|
|
503,379
|
|
301,949
|
Acquisition related
expense
|
|
43,991
|
|
1,218,432
|
Financing related
expense
|
|
17,834
|
|
-
|
Restructuring
|
|
47,187
|
|
-
|
Equity in losses of
investee
|
|
3,782
|
|
-
|
Other expense
(income)
|
|
-
|
|
124
|
Adjusted
EBITDA
|
|
$
(1,840,729)
|
|
$
(3,178,093)
|
Akerna
Corp.
|
The reconciliation of
operating expenses to non-GAAP operating expenses is as
follows:
|
(unaudited)
|
|
|
|
Three Months Ended
March 31,
|
|
|
2021
|
|
2020
|
|
|
|
|
|
Operating
expenses
|
|
$
6,065,860
|
|
$
6,553,029
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
Depreciation and amortization
|
|
1,052,883
|
|
180,229
|
Stock-based compensation expense
|
|
503,379
|
|
301,949
|
Business
combination and merger related costs
|
|
43,991
|
|
1,218,432
|
Financing related expense
|
|
17,834
|
|
-
|
Restructuring charges
|
|
47,187
|
|
-
|
Non-GAAP operating
expenses
|
|
$
4,400,586
|
|
$
4,852,420
|
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SOURCE Akerna