Akerna Corp. Archives - Green Market Report

Adam JacksonAugust 11, 2022
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Akerna Corp. (Nasdaq: KERN) posted less than positive results as it missed expectations — showing that mixed demand and weaker sales are rippling through the sector. The cannabis tech firm released its second-quarter financial report card ending June 30, 2022.

Akerna missed expectations with total revenues of approximately $6.1 million during the period, a 24% gain from $4.9 million for the same quarter last year — missing Yahoo Finance Average analyst estimate for revenues of $7.1 million.

“We have continued to take important steps to grow revenue, reduce costs, and position ourselves for growth in the future,” said CEO Jessica Billingsley. “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.”

Software revenue was $5.9 million, up 33% from $4.5 million in the same time last year — with $600,000 worth of software bookings this quarter.

The company saw a gross profit of $4.2 million, or 69.8% of total revenues — up 42% versus $3.0 million in the prior year.

The company also reported a second-quarter 2022 GAAP net loss of $29.6 million — including a $24.1 million impairment of certain long-lived assets — versus a net loss of $22 million sequentially and a loss of $6.1 million last year. However, the company noted that reductions announced in June are expected to generate material cost savings in the second half of 2022.

Diluted loss per share in the fourth quarter was $0.83 cents versus diluted earnings per share of $0.12 cents in the same period 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,” Billingsley said.

Despite taking cost-reduction steps, the company said average new business deals decreased by 9% year-over-year.

Adjusted EBITDA was a loss of $2.1 million in the second quarter — down 22% from a loss of $2.3 in the previous quarter — versus a loss of $1.6 in the same period last year.

The company said it had $14.1 million in cash and restricted cash as of July 5, 2022 — following the closing of a $10 million financing via S-1 filed/effective on June 29, 2022. It said it would continue to “pursue strategic alternatives to optimize the capital structure and strengthen the balance sheet.”


StaffJuly 5, 2022
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The Daily Hit is a recap of the top cannabis business stories for July 5, 2022.

ON THE SITE

Emerald Health Gives Update on Cannabis Exit

On Monday, Canadian-based Emerald Health Therapeutics, Inc. (CSE: EMH) (OTCQB: EMHTF)  reported its financial results for the year ended December 31, 2021, and gave an update on its plans to exit the cannabis industry. Total revenue for Emerald Health in 2021 fell to C$11.8 million from last year’s C$14.2 million. Read more here.

Analyst Sees Value in Beaten Down Cannabis MSOs

Cantor Fitzgerald analyst Pablo Zuanic issued a report this morning in which he sees some value in the beaten-up cannabis group, although he also cautioned that numerous roadblocks remain. He was clear that the group may not have even found a bottom yet as prices continue to slide along with the broader market. Zuanic also noted that even the second quarter might not bring relief on valuations, but he is a selective buyer at these levels. Having said that he said investors may not see any meaningful upside for another two to three years and that it would probably only occur when some sort of federal reform occurs. Read more here.

SPACs Losing Their Mojos as Deals get Pushed Out

SPACs (Special Purpose Acquisition Corp.) were the hottest thing going on in the cannabis industry for the past couple of years, but the buzz may be wearing off. These SPACs would raise millions and then search for a “qualifying transaction.”  In other words, the money was looking for a company to essentially buy and take public. It was an easy way for cannabis companies to get investor money and quickly become publicly-traded stocks. However, these deals frequently turned sour for the secondary buyers dampening the interest. Read more here.

Flower One’s Revenue Drops in Fourth Quarter, Restructures Debt Payments

Flower One Holdings Inc.  (CSE: FONE) (OTCQX: FLOOF) has made some movement with its ongoing restructuring, including the restructuring of its term debt and its master lease. This comes on the heels of the company reporting its annual earnings. For the year ending in December 2021, Flower One reported 2021 revenue of $58.4 million, representing a 70% increase from the prior year. Despite all that revenue, as of December 31, 2021, the company only had cash and cash equivalents of $0.9 million, compared with $1.1 million as of December 31, 2020. Read more here.

Psychedelics Could be a Real Cure for Alcoholism

According to a substance use study, alcohol use disorder accounts for a majority of substance use disorder cases in the U.S., with 14.5 million or 5.3 percent of Americans aged 12 or older meeting diagnostic criteria for an alcohol use disorder in 2017 (AUD). It is a significant medical and social problem in American society, accounting for 88,000 deaths per year and more than $250 billion in annual costs. Alcohol misuse is also implicated in cancer, liver disease, and heart disease. Read more here.

IN OTHER NEWS

Acreage Holdings, Inc., Chalice Brands Ltd.

Acreage Holdings, Inc. (CSE:ACRG.A.U, ACRG.B.U), (OTCQX: ACRHF, ACRDF), a vertically integrated, multi-state operator of cannabis cultivation and retailing facilities in the U.S., today announced that it has executed and closed an amendment to its previously announced asset purchase and services agreement with Chalice Brands Ltd. (CSE:CHAL) (OTCQB:CHALF), completing the sale of the company’s four Oregon retail dispensaries branded as Cannabliss & Co. Read more here.

HEXO Corp, Tilray Brands, Inc.

HEXO Corp (TSX: HEXO; NASDAQ: HEXO) announced that at its reconvened special meeting of shareholders held today, holders of common shares of HEXO approved the previously announced transaction with Tilray Brands, Inc. (Nasdaq | TSX: TLRY) and HT Investments MA LLC. The meeting was originally held on June 14, 2022, and was adjourned prior to shareholders voting on the note transaction in order to provide shareholders with additional time to consider the previously announced amendments to the note transaction. Read more here.

Akerna Corp.

Akerna Corp. (Nasdaq: KERN), an enterprise software company and developer in the global cannabis industry, today announced the closing of its previously announced underwritten public offering of (i) 29,382,861 units of the company consisting of 29,382,861 shares of common stock together with common stock warrants to purchase up to 29,382,861 shares of common stock and (ii) 14,095,400 pre-funded units, consisting of 14,095,400 pre-funded warrants, with each pre-funded warrant exercisable for one share of common stock, together with common warrants to purchase up to 14,095,400 shares of common stock. Read more here.

Entourage Health Corp.

Entourage Health Corp. (TSX-V:ENTG) (OTCQX:ETRGF) (FSE:4WE), a Canadian producer and distributor of cannabis products, announced it has amended its existing senior secured credit facility entered into on March 29, 2019, between the company and Bank of Montreal, and its existing second secured credit facility with an affiliate of the LiUNA Pension Fund of Central and Eastern Canada, entered into on September 30, 2020. The latest amendments to the Senior Credit Facility and Second Credit Facility modify the respective terms under which Entourage secured debt financing. Read more here.

Alcohol and Gaming Commission of Ontario

Today the Royal Canadian Mounted Police (RCMP) announced it has laid multiple criminal charges against five individuals. Their investigation discovered that over $3 Million CAD from the illegal sale of cannabis was laundered, including through casinos in the GTA and Niagara regions. Members of the Ontario Provincial Police’s Investigation and Enforcement Bureau (IEB), attached to the Alcohol and Gaming Commission of Ontario (AGCO) provided assistance to the RCMP throughout their investigation. Read more here.

Stem Holdings, Inc.

Stem Holdings, Inc. (OTCQX: STMH, CSE: STEM), a vertically-integrated cannabis and hemp branded products company, announced that the company has received the approval of the Holders of the Warrants and the Holders of the Convertible Debentures to reprice the convertible securities issued in connection with the company’s special warrant financing, which matured on June 27, 2022, and will mature September 14, 2022. Read more here.

The Flowr Corporation

The Flowr Corporation (TSX.V: FLWR; OTC: FLWPF) herein announces the resignation of Maurice Levesque and Don Duet from the Board of Directors who are departing in order to pursue other opportunities. Flowr would like to thank Mr. Levesque and Mr. Duet for their service to the Company and wish them success in their future endeavors. Read more here.


StaffMay 26, 2022
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The Daily Hit is a recap of the top cannabis business stories for May 26, 2022.

ON THE SITE

Cannabis Executives Go On Stock Buying Spree

As the cannabis industry matures, certain patterns are beginning to be established not unlike other retail industries. The one that just occurred is the first-quarter dip in sales. As companies are delivering their first-quarter results, many told investors that sales dipped after the fourth quarter, but that the second quarter was picking up. Read more here.

Ayr Wellness Inc.

Ayr Wellness Inc. (OTCQX: AYRWF) reported financial results for the first quarter ending March 31, 2022 with revenue rising 90% to $111.2 million over last year’s $58 million. Sales did slip a tiny bit from the fourth quarter’s revenue of $111.8 million. Ayr is forecasting $250 million of Adjusted EBITDA, $100 million of operating income, and $800 million of revenue for the fourth quarter of 2022. Read more here.

Decibel Cannabis Company Inc.

Decibel Cannabis Company Inc.  (TSXV: DB) (OTCQB: DBCCF) released its first-quarter financial results for the first quarter ending March 31, 2022. Decibel reported $23 million in total sales for the quarter, with strong growth over the fourth quarter and topping last year’s revenue of $14 million in the same time period in 2021. The company said that net revenue growth was driven by the launch of Decibel’s new infused pre-roll lines and continued growth in demand for flower, vape and concentrate products, despite the first quarter historically being a seasonally weak period. Read more here.

Humble & Fume Inc.

Humble & Fume Inc. (CSE: HMBL) (OTCQX: HUMBF) reported its third-quarter fiscal 2022 financial results for the fiscal third-quarter ending March 31, 2022. Revenue fell to $16 million in the quarter versus last year’s revenue of $18 million for the same time period. Humble & Fume said that the revenue decreased as a result of management’s focus on selling higher-margin products and moving away from lower-margin sales channels. Read more here.

Biotech Investors are Circling Around Psychedelics

Investment in a biotech company is a tricky move for any seasoned investor. It’s always challenging, with great potential wealth tied up for years while the results of clinical trials get published and the approval process of the Food and Drug Administration (FDA) slogs on. To really understand it, there is complicated medical jargon to figure out amidst starry-eyed promises being promoted of treating a human illness or disease for the first time with a new life-changing drug. Read more here. Read more here.

IN OTHER NEWS

Aurora Cannabis Inc.

Aurora Cannabis Inc. (NASDAQ: ACB) (TSX: ACB), a Canadian cannabis company, today has announced that it has entered into an agreement with a syndicate of underwriters led by Canaccord Genuity and BMO Capital Markets, under which the underwriters have agreed to buy on bought deal basis 51.1 million units of the Company, at a price of US $2.45 per Unit for gross proceeds of approximately US $125.2 million. Each unit will be comprised of one common share of the company and one common share purchase warrant of the company. Each warrant will be exercisable to acquire one common share of the company for a period of 36 months following the closing date of the offering at an exercise price of US $3.20 per warrant share, subject to adjustment in certain events. Read more here.

Curaleaf Holdings, Inc.

Curaleaf Holdings, Inc. (CSE: CURA /OTCQX: CURLF), an international provider of consumer products in cannabis, announced the launch of Endless Coast Cannabis-Infused Seltzers, a highly sociable line of low-calorie, low-sugar and low-carb beverages which will be available tomorrow at Curaleaf dispensaries in Massachusetts. Read more here.

The Green Organic Dutchman Holdings Ltd.

The Green Organic Dutchman Holdings Ltd. (CSE: TGOD) (OTC: TGODF), a sustainable global cannabis company, reported its financial results for the quarter ended March 31, 2022. “We continued our momentum from Q4 2021 with strong Q1 2022 results, including another record month in March. These results can be attributed to the launch of new products and our existing products gaining further traction, affirming the strategic approach we have taken,” commented Sean Bovingdon, CEO of TGOD. Read more here.

Akerna Corp.

Akerna Corp. (Nasdaq: KERN) announced today the results of its reconvened 2022 annual meeting of stockholders held Wednesday, May 25, 2022, at 9 a.m. Mountain Time with respect to all proposals described in Akerna’s definitive proxy statement filed with the U.S. Securities and Exchange Commission on April 19, 2022. Read more here.

Icanic Brands Company, LEEF Holdings, Inc.

Icanic Brands Company, Inc. (CSE: ICAN, OTCQB: ICNAF), a brand operator of California cannabis brands, provided the following corporate update and revenue forecast for the three-month period ending July 31, 2022 and for the fiscal year ending July 31, 2023. These financial results reflect the first full quarter and fiscal year of Icanic Brands combined with its recent acquisition of LEEF Holdings, Inc., a California based extractions company. Read more here.

Kiaro Holdings Corp.

Kiaro Holdings Corp. (TSXV: KO) (OTC: KIARF), is today pleased to announce its fourth quarter and year-end financial results for fiscal year 2022 ended January 31, 2022.  Significantly expanded retail channel, from 7 to 17 stores, and the addition of experienced results-driven leaders to drive new and expanding revenue channels has delivered record results. Read more here.

Rubicon Organics Inc.

Rubicon Organics Inc. (TSXV: ROMJ) (OTCQX: ROMJF) announces that in accordance with the Company’s equity incentive plan, it has amended the terms of 778,500 incentive stock options and granted 40,000 incentive stock options to employees of Rubicon. Read more here.

 


Debra BorchardtOctober 24, 2019
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Akerna Corp. (NASDAQ: KERN), a leading cannabis compliance technology company, has made a strategic investment for an undisclosed amount in ZolTrain, a training platform built for the mobile world. ZolTrain was founded 10 years ago by Jan Cole who recognized that an educated budtender delivered a measurable boost to sales. It is an online, on-demand training platform that gets budtenders the knowledge they need to sell cannabis products.

“Our strategy at Akerna is to accelerate our organic growth with strategic acquisitions and investments that are complementary to our business and drive recurring revenue. ZolTrain is the first of these investments,” said Jessica Billingsley, chief executive officer, Akerna. “ZolTrain is important to the maturation of the industry, enabling greater consumer, product, and public safety through education. MJ Platform is the only technology solution that can address tracking and compliance and, through our investment in ZolTrain, improve the customer experience by pairing education with product information at the point of sale.”

By integrating ZolTrain with the MJ Freeway platform, Akerna said that its customers can educate budtenders, track their training and have a resource at the point of sale. MJ Platform users can sign up for Zoltrain now and the integration with MJ Platform will be completed in December.

“As a dispensary owner, I was struck by the challenges of not only keeping my budtenders and staff up to date on brand information but also engaged with the content. Depending on the dispensary, a budtender can be working with anywhere from 200 to 1,000 products. It would be impossible to maintain that much product information,” said Jan Cole, founder, ZolTrain. “Now, with this integrated solution, a budtender can take a tutorial in less than sixty seconds on their smartphone and have access to product information through MJ Platform at the point of sale. In my experience, an educated budtender, making the right recommendations to customers, facilitates compliance and drives loyalty.”


William SumnerJuly 18, 2019
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It’s time for your Daily Hit of cannabis financial news for July 18, 2019.

On the Site

Aurora Cannabis

Italy has chosen Canadian-based Aurora Cannabis Inc. (NYSE: ACB) (TSX: ACB) as the sole winner of the Italian government’s public tender to supply medical cannabis in Italy. The contract is expected to be signed in September 2019… It will be a two-year contract in which Aurora will provide 400 kg of medical marijuana from its Canadian facilities.

5 Ways To Fix The California Cannabis Market

While it would be wonderful to have the luxury of starting over again, rebooting is not an option for California. The past cannot be changed. Those who are interested in addressing the chaos in the regulation of California’s cannabis industry must go forward from where we are today.

 In Other News

Neptune Wellness Solutions

Neptune Wellness Solutions Inc. (NASDAQ: NEPT) (TSX: NEPT) announced that it has closed a private placement offering of 9,415,910 common shares of the company, at a price of $4.40 per share, for $41.4 million. The offering was led by Perceptive Advisors. The proceeds of the offering will go towards working capital, general corporate purposes, and the acquisition of the assets of SugarLeaf Labs LLC and Forest Remedies LLC. The SugarLeaf acquisition is expected to close on or around July 31, 2019.

MediPharm Labs

MediPharm Labs Corp. (TSXV: LABS) (OTCQX: MEDIF) announced that it has received conditional approval to trade it shares on the Toronto Venture Exchange and list its common shares on the TSX under the symbol “LABS”. “We are thrilled to have qualified to uplist to the TSX. This is an important step for the MediPharm Labs team and our shareholders,” said MediPharm Labs CEO, Patrick McCutcheon.

Origin House

Origin House (CSE: OH) (OTCQX: ORHOF) announced that its preliminary unaudited revenue for the second quarter, ending on June 30, 2019, was $21 million, representing an approximate gross margin, excluding fair value items, of 17%. The company plans on releasing its full financial results for the quarter during the second half of August. “Origin House has continued to gain momentum as our team leveraged the California-focused platform we have built over the past two years to drive another quarter of record revenue along with steady progress on gross margin. As expressed previously, we strongly believe that 2019 will mark an inflection point both for the California market and Origin House as a whole and the numbers are proving this out,” said Marc Lustig, Chairman and CEO of Origin House.

Akerna Corp.

Akerna Corp. (Nasdaq: KERN) announced today that it has partnered with Leafly to integrate its seed-to-sale compliance software, MJ Platform, with Leafly.com. With the integration, MJ Platform users will be able to view their inventory and menus automatically update on Leafly. “MJ Platform is the cannabis industry’s first ERP software and through partnerships, such as the one with Leafly, we provide a leading compliance, technology platform across the entire supply chain that connects almost every data point,” said Akerna CEO, Jessica Billingsley. “The partnership with Leafly provides a seamless integration for MJ Platform users, which is good business practice as it eliminates manual updates and delayed information.”


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Today MTech Acquisition Corp. and MJ Freeway LLC announced the completion of their merger to form the Akerna Corp. MTech Acquisition Corp. (NASDAQ: MTEC), the first US-listed Special Purpose Acquisition Company (SPAC) focused on acquiring a business ancillary to the cannabis industry, and MJ Freeway, a leading seed-to-sale regulatory compliance technology provider and developer of the cannabis industry’s first enterprise resource planning (ERP) platform, has now become the first compliance technology company in the cannabis space to be traded on Nasdaq. Jessica Billingsley also becomes the first female CEO from the cannabis industry to lead a company that will trade on the exchange.

“As legalization of cannabis expands across the world, we believe it is imperative that businesses, patients, consumers, and governments have the tracking and compliance technology they need to make informed decisions and comply with applicable regulations. We believe Akerna is well suited to meet these needs with the ability to scale rapidly across the world and offer a robust and innovative platform for growing industry demands,” stated MJ Freeway Co-Founder & Chief Executive Officer Jessica Billingsley.

In addition to her role as CEO, Billingsley also serves on the Akerna Board of Directors and is joined by senior leadership from MTech: Scott Sozio, Tahira Rehmatullah and Douglas Rothschild. The Board of Directors of Akerna also includes Emery Huang, Matt Kane, and Mark D. Iwanowski, who were formerly members of MJ Freeway’s Board of Directors. Roger McNamee, who served as senior advisor to MJ Freeway’s Board of Directors, will act as Senior Advisor to the Board of Directors of Akerna.

The business combination between the two companies was approved at a meeting of MTech stockholders today. In connection with the transaction, MTech and MJ Freeway combined to form Akerna Corp. (“Akerna”). The shares of common stock and warrants of Akerna will begin trading on The Nasdaq Stock Market tomorrow, June 18, 2019, under the symbols “KERN” and “KERNW,” respectively. The company also announced raising $9.2 million prior to this closing.

“We are very pleased to close this transaction and look forward to capitalizing on the substantial operating and financial benefits we believe the combination will create. From here, we believe we are well positioned to pursue our acquisition strategy to drive transformation for future growth in the regulatory technology sector,” commented Scott Sozio, CEO of MTech. “We believe comprehensive, compliant, scalable technology solutions will underpin the industry’s rapid growth, and serve as a backbone for sustained success.”

Roger McNamee, Senior Advisor to the Akerna Board of Directors added, “Cannabis companies that want to be leaders are adopting MJ Platform, because it is the only ERP product with the technical foundation to support multi-line and multi-location operations. This transaction will enable MJ to better support customers manage high growth and complexity as the industry transitions from local to a global scale.”

Upon the closing of the transaction, the former MJ Freeway equity holders exchanged their securities of MJ Freeway for securities of Akerna, and the former equity holders of MTech exchanged their securities of MTech for securities of Akerna. As a result of the former MJ Freeway equity holders beneficially own approximately 62.7% of Akerna’s outstanding shares of common stock (including the shares held in escrow and unvested restricted shares); the former MTech stockholders beneficially own approximately 27.7% of Akerna’s outstanding common stock; and the investors in MTech’s previously-announced private placement that closed concurrently with the business combination beneficially own approximately 9.6% of Akerna’s outstanding shares of common stock. Legal counsel for the business combination was provided by Graubard Miller (MJ Freeway) and Ellenoff Grossman & Schole LLP (MTech).

 


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The Green Market Report focuses on the financial news of the rapidly growing cannabis industry. Our target approach filters out the daily noise and does a deep dive into the financial, business and economic side of the cannabis industry. Our team is cultivating the industry’s critical news into one source and providing open source insights and data analysis


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