Akerna Wraps Up 2022 With Losses, Exits Cannabis

Former cannabis company Akerna (Nasdaq: KERN) reported its unaudited financial results for the fourth quarter, which ended Dec. 31, 2022. Akerna is attempting to sell off its cannabis assets and has plans to merge with Gryphon Digital Mining.

Akerna reported that its software revenue fell 24% to $2.8 million for the fourth quarter and the total revenue for the quarter was also $2.8 million, which fell 30% versus last year’s fourth quarter. The company delivered a net loss of $25.2 million for the quarter versus $17.2 million for the same time period in the previous year.

Software revenue for the full year fell 19% to $12.9 million, while the total revenue for the full year fell 23% to $13.6 million. Akerna had a net loss for the full year of $79.1 million versus a net loss of $31.3 million for the previous year.

The company had cash and restricted cash of $7.9 million as of Dec. 31, 2022.

Losses from operations of $11.7 million and $55.4 million compared to a loss of $19.8 million and $33.1 million, respectively in last year’s same periods, reflecting lower overall operating expenses and less significant impairments in the current quarter of 2022 and higher depreciation, amortization and impairments in the full year 2022. The adjusted EBITDA loss was $1.8 million and $8.9 million compared with a loss of $3.1 million and $8.3 million for the same quarterly and annual periods of 2021.

Parts for Sale

Akerna decided to peace out on cannabis and sold its 365 Cannabis and Last Call Analytics business units in January 2023 for combined consideration valued at approximately $2.9 million. POSaBIT will tentatively be acquiring MJ Freeway, including the MJ Platform and Leaf Data System brands, and Ample Organics in the proposed sale transaction.

Green Market Report reported in January that Akerna said it would sell those business units to POSaBIT for $4 million in cash. The company said it planned to use the proceeds of the transaction, after expenses, to pay its remaining outstanding accounts payable and pay down any remaining principal balance on its outstanding senior secured convertible notes, in addition to net cash requirements associated with the proposed merger between Akerna and Gryphon.

“This transaction provides POSaBIT with an opportunity to combine complementary offerings to scale its business and expand its footprint with established platforms,” the company said in a statement. “These complementary products are likely to be mutually beneficial, as together they are expected to provide a comprehensive retail solution for cannabis operators, complete with supply chain compliance.”

Debra Borchardt

Debra Borchardt is the Co-Founder, and Executive Editor of GMR. She has covered the cannabis industry for several years at Forbes, Seeking Alpha and TheStreet. Prior to becoming a financial journalist, Debra was a Vice President at Bear Stearns where she held a Series 7 and Registered Investment Advisor license. Debra has a Master's degree in Business Journalism from New York University.

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