Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 6 Months Ended | |
Dec. 31, 2020 | Mar. 15, 2021 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Akerna Corp. | |
Entity Central Index Key | 0001755953 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Type | 10-KT | |
Document Period End Date | Dec. 31, 2020 | |
Document Fiscal Period Focus | FY | |
Document Fiscal Year Focus | 2020 | |
Entity Well-known Seasoned Issuer | No | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Shell Company | false | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Interactive Data Current | Yes | |
Entity File Number | 001-39096 | |
Entity Incorporation State Country Code | DE | |
Entity Public Float | $ 116.7 | |
Entity Common Stock, Shares Outstanding | 22,912,648 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2020 | Jun. 30, 2020 | Jun. 30, 2019 |
Current assets: | |||
Cash | $ 17,840,640 | $ 24,155,828 | $ 21,867,289 |
Restricted cash | 500,000 | 500,000 | 500,000 |
Accounts receivable, net | 1,753,547 | 1,861,534 | 1,257,274 |
Prepaid expenses & other current assets | 2,458,727 | 1,215,341 | 577,674 |
Total current assets | 22,552,914 | 27,732,703 | 24,202,237 |
Non-current assets: | |||
Fixed assets, net | 1,193,433 | 131,095 | |
Investment, net | 233,664 | 246,308 | |
Capitalized software, net | 3,925,739 | 2,629,304 | |
Intangible assets, net | 7,388,795 | 7,493,975 | |
Goodwill | 41,874,527 | 20,254,309 | |
Other noncurrent assets | 41,925 | ||
Total assets | 77,169,072 | 58,529,619 | 24,202,237 |
Current liabilities: | |||
Accounts Payable, accrued expenses and other current liabilities | 3,188,576 | 4,861,928 | 1,818,116 |
Contingent consideration payable | 389,000 | ||
Deferred revenue | 843,900 | 368,685 | 624,387 |
Current portion of long-term debt | 11,707,363 | 6,135,364 | |
Total current liabilities | 15,739,839 | 11,754,977 | 2,442,503 |
Long-term debt, less current portion | 3,895,237 | 10,200,236 | |
Total liabilities | 19,635,076 | 21,955,213 | 2,442,503 |
Commitments and contingencies (Note 13) | |||
Stockholders' equity | |||
Preferred stock | |||
Exchangable preferred stock | 20,405,219 | ||
Common stock | 1,990 | 1,321 | 1,059 |
Additional paid-in capital | 95,090,883 | 72,906,924 | 47,325,421 |
Accumulated other comprehensive (loss) income | (91,497) | 63,000 | |
Accumulated deficit | (57,872,599) | (41,101,091) | (25,566,746) |
Total stockholders’ equity | 57,533,996 | 31,870,154 | 21,759,734 |
Noncontrolling interests in consolidated subsidary | 4,704,252 | ||
Total equity | 57,533,996 | 36,574,406 | 21,759,734 |
Liabilities and stockholders' equity | $ 77,169,072 | $ 58,529,619 | $ 24,202,237 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Dec. 31, 2020 | Jun. 30, 2020 | Jun. 30, 2019 |
Preferred stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 | 0 |
Common stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 75,000,000 | 75,000,000 | 10,589,746 |
Common stock, shares issued | 19,901,248 | 13,258,707 | 10,589,746 |
Common stock, shares outstanding | 19,901,248 | 13,258,707 | 10,589,746 |
Special Voting Preferred Stock | |||
Preferred stock, par value | $ 0.0001 | $ 0.0001 | |
Preferred stock, shares authorized | 1 | 0 | |
Preferred stock, shares issued | 1 | 0 | |
Preferred stock, shares outstanding | 1 | 0 | |
Preferred Stock, Liquidation Preference, Value | $ 1 | ||
Exchangeable Shares [Member] | |||
Preferred stock, shares issued | 2,667,349 | 0 | |
Preferred stock, shares outstanding | 2,667,349 | 0 | |
Preferred stock, no par value |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 6 Months Ended | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Revenue | ||||
Software | $ 6,766,985 | $ 4,802,654 | $ 9,976,580 | $ 8,256,492 |
Consulting | 916,099 | 1,556,363 | 2,379,947 | 2,307,129 |
Other revenue | 141,700 | 140,076 | 216,749 | 259,496 |
Total revenue | 7,824,784 | 6,499,093 | 12,573,276 | 10,823,117 |
Cost of revenue | 3,141,041 | 2,994,940 | 6,209,724 | 4,633,844 |
Gross profit | 4,683,743 | 3,504,153 | 6,363,552 | 6,189,273 |
Total Operating expenses | ||||
Product development | 3,166,088 | 1,234,403 | 3,206,310 | 5,565,097 |
Sales and marketing | 3,928,028 | 3,725,012 | 7,792,480 | 7,498,114 |
General and administrative | 4,435,067 | 4,655,207 | 11,320,715 | 5,638,408 |
Depreciation and amortization | 2,007,237 | 104,667 | 1,315,898 | |
Impairment of long-lived assets | 6,887,000 | |||
Total operating expenses | 20,423,420 | 9,719,289 | 23,635,403 | 18,701,619 |
Loss from operations | (15,739,677) | (6,215,136) | (17,271,851) | (12,512,346) |
Other income (expense) | ||||
Interest expense | (198,195) | (3,734) | ||
Interest Income | 5,111 | 125,239 | 160,412 | 91,239 |
Change in fair value of convertible notes | (961,273) | 766,000 | ||
Other (expense) income | (59,272) | (130) | (254) | 17,892 |
Total other (expense) income | (1,213,629) | 125,109 | 922,424 | 109,131 |
Net loss before income tax expense | (16,953,306) | (6,090,027) | (16,349,427) | (12,403,215) |
Income tax expense | (200) | (30,985) | ||
Equity in losses of investee | (12,643) | (3,692) | ||
Net Loss | (16,966,149) | (6,090,027) | (16,384,104) | (12,403,215) |
Net loss attributable to noncontrolling interest in consolidated subsidiary | 8,815 | 849,759 | ||
Net loss attributable to Akerna shareholders | $ (16,957,334) | $ (6,090,027) | $ (15,534,345) | $ (12,403,215) |
Basic and diluted weighted average common shares outstanding | 16,056,030 | 10,918,942 | 11,860,212 | 6,045,382 |
Basic and diluted net loss per common share | $ (1.06) | $ (0.56) | $ (1.31) | $ (2.05) |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) | 6 Months Ended | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ (16,966,149) | $ (6,090,027) | $ (16,384,104) | $ (12,403,215) |
Other comprehensive (loss) income: | ||||
Foreign currency translation adjustment | (21,497) | |||
Unrealized (loss) gains on convertible notes | (133,000) | 63,000 | ||
Comprehensive loss | (17,120,646) | (6,090,027) | (16,321,104) | (12,403,215) |
Comprehensive loss attributable to the noncontrolling interest | 8,815 | 849,759 | ||
Comprehensive loss attributable to Akerna shareholders | $ (17,111,831) | $ (6,090,027) | $ (15,471,345) | $ (12,403,215) |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity - USD ($) | Total | Special Voting Preferred Stock | Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Loss | Accumulated Deficit | Total Stockholder's Equity | Noncontrolling Interest in Consolidated Subsidiary |
Balance at Jun. 30, 2018 | $ 1,400,063 | $ 492 | $ 14,563,102 | $ (13,163,531) | $ 1,400,063 | |||
Balance, shares at Jun. 30, 2018 | 4,922,650 | |||||||
Issuance of common stock | 10,000,000 | $ 110 | 9,999,890 | 10,000,000 | ||||
Issuance of common stock, shares | 1,099,376 | |||||||
Issuance of shares in connection with reverse merger | 18,878,775 | $ 388 | 18,878,387 | 18,878,775 | ||||
Issuance of shares in connection with reverse merger, shares | 3,880,282 | |||||||
Issuance of common stock for compensation in connection with reverse merger | 3,393,281 | $ 50 | 3,393,231 | 3,393,281 | ||||
Issuance of common stock for compensation in connection with reverse merger, shares | 498,073 | |||||||
Stock-based compensation amortization | 490,830 | 490,830 | 490,830 | |||||
Common stock issued upon cashless exercise of options | $ 19 | (19) | ||||||
Common stock issued upon cashless exercise of options, shares | 189,365 | |||||||
Net loss | (12,403,215) | (12,403,215) | (12,403,215) | |||||
Balance at Jun. 30, 2019 | 21,759,734 | $ 1,059 | 47,325,421 | (25,566,746) | 21,759,734 | |||
Balance, shares at Jun. 30, 2019 | 10,589,746 | |||||||
Adoption of ASC 606 Adjustment | 185,826 | 185,826 | 185,826 | |||||
Common stock issued upon warrant exercise | 4,247,065 | $ 37 | 4,247,028 | 4,247,065 | ||||
Common stock issued upon warrant exercise, shares | 369,311 | |||||||
Common stock issued in business combinations | 20,081,466 | $ 230 | 20,081,236 | 20,081,466 | ||||
Common stock issued in business combinations, shares | 2,299,650 | |||||||
Acquisition of noncontrolling interests | 5,554,011 | 5,554,011 | ||||||
Stock-based compensation amortization | 1,253,234 | 1,253,234 | 1,253,234 | |||||
Forfeitures of restricted shares | $ (5) | 5 | ||||||
Forfeitures of restricted shares, shares | (54,901) | |||||||
Unrealized loss (gains) on Convertible Notes | 63,000 | 63,000 | 63,000 | |||||
Net loss | (16,384,104) | (15,534,345) | (15,534,345) | (849,759) | ||||
Balance at Jun. 30, 2020 | 31,870,154 | $ 1,321 | 72,906,924 | 63,000 | (41,101,091) | 31,870,154 | 4,704,252 | |
Balance, shares at Jun. 30, 2020 | 13,203,806 | |||||||
Balance as of July 1, 2020 | 36,760,232 | $ 1,321 | 72,906,924 | 63,000 | (40,915,265) | 32,055,980 | 4,704,252 | |
Balance as of July 1, 2020, shares | 13,203,806 | |||||||
Issuance of common stock | $ 11,032,380 | $ 500 | 11,031,880 | 11,032,380 | ||||
Issuance of common stock, shares | 113,375 | 5,000,000 | ||||||
Special voting preferred stock issued in business combination | $ 25,203,490 | $ 25,203,490 | 25,203,490 | |||||
Special voting preferred stock issued in business combination, shares | 3,294,574 | |||||||
Conversion of exchangable shares to common | $ (4,798,271) | $ 63 | 4,798,208 | |||||
Conversion of exchangable shares to common, shares | (627,225) | 627,225 | ||||||
Acquisition of noncontrolling interests | $ 80 | 4,695,357 | 4,695,437 | (4,695,437) | ||||
Acquisition of noncontrolling interest, shares | 800,000 | |||||||
Stock-based compensation amortization | 1,298,540 | 1,298,540 | 1,298,540 | |||||
Settlement of convertible debt | 360,000 | $ 11 | 359,989 | 360,000 | ||||
Settlement of convertible debt, shares | 112,867 | |||||||
Restricted stock unit vesting | $ 15 | (15) | ||||||
Restricted stock unit vesting, shares | 157,350 | |||||||
Unrealized loss (gains) on Convertible Notes | (133,000) | (133,000) | (133,000) | |||||
Foreign currency translation adjustments | (21,497) | (21,497) | (21,497) | |||||
Net loss | (16,966,149) | (16,957,334) | ||||||
Balance at Dec. 31, 2020 | $ 57,533,996 | $ 20,405,219 | $ 1,990 | $ 95,090,883 | $ (91,497) | $ (57,872,599) | $ 57,533,996 | |
Balance, shares at Dec. 31, 2020 | 2,667,349 | 19,901,248 | (16,957,334) | (8,815) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 6 Months Ended | 12 Months Ended | |
Dec. 31, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | |
Cash flows from operating activities | |||
Net loss | $ (16,966,149) | $ (16,384,104) | $ (12,403,215) |
Adjustment to reconcile net loss to net cash used in operating activities | |||
Bad debt expense | 72,832 | 1,094,507 | 345,941 |
Stock-based compensation expense | 1,197,589 | 1,166,130 | 3,884,111 |
Depreciation and amortization | 2,007,237 | 1,315,898 | |
Amortization of deferred contract costs | 228,766 | ||
Non-cash interest expense | 32,727 | ||
Impairment of long-lived assets | 6,887,000 | ||
Equity in losses of investee | 12,643 | 3,692 | |
Loss on sale of fixed asset | 84,835 | ||
Debt issuance costs classified as financing | 1,177,390 | ||
Change in fair value of convertible notes | 961,273 | (766,000) | |
Change in fair value of contingent consideration | (993,000) | (998,000) | |
Changes in operating assets and liabilities: | |||
Accounts receivable | 1,008,775 | (1,621,262) | (1,572,889) |
Prepaid expenses and other current assets | (689,729) | (592,807) | (351,144) |
Other assets | 41,925 | (58,925) | |
Accounts payable, accrued expenses and other current liabilities | (2,498,374) | 1,602,751 | 893,845 |
Deferred revenue | (94,088) | (286,922) | 154,756 |
Net cash used in operating activities | (8,705,738) | (14,347,652) | (9,048,595) |
Cash flows from investing activities | |||
Developed software additions | (1,847,710) | (3,102,728) | |
Furniture, fixtures, and equipment additions | (12,203) | (156,636) | |
Cash paid for business combinations, net of cash acquired | (5,279,134) | (88,720) | |
Investment in equity method investee | (250,000) | ||
Cash received in connection with the reverse merger | 18,843,483 | ||
Net cash used in investing activities | (7,139,047) | (3,598,084) | 18,843,483 |
Cash flows from financing activities | |||
Proceeds from the issuance of long term debt | 17,164,600 | ||
Payments on debt | (1,500,000) | ||
Cash paid for debt issuance costs | (1,177,390) | ||
Proceeds from the exercise of warrants | 4,247,065 | ||
Proceeds from the issuance of common stock | 12,000,000 | 10,000,000 | |
Offering costs from the issuance of common stock | (967,620) | ||
Net cash provided by financing activities | 9,532,380 | 20,234,275 | 10,000,000 |
Effect of exchange rate changes on cash and restricted cash | (2,783) | ||
Net (decrease) increase in cash and restricted cash | (6,315,188) | 2,288,539 | 19,794,888 |
Cash and restricted cash - beginning of period | 24,655,828 | 22,367,289 | 2,572,401 |
Cash and restricted cash - end of period | 18,340,640 | 24,655,828 | 22,367,289 |
Cash paid for taxes | |||
Cash paid for interest | 150,000 | ||
Supplemental disclosure of non-cash investing and financing activity: | |||
Adjustments due to the adoption of ASC 606 | 185,826 | ||
Cashless exercise of options | 19 | ||
Vesting of restricted stock units | 15 | ||
Settlement of convertible notes in common stock | 327,273 | ||
Stock-based compensation capitalized as software development | 100,951 | 87,104 | |
Acquisition of noncontrolling interest | 4,695,437 | ||
Capitalized software included in accrued expenses | 189,198 | ||
Special voting preferred stock issued in business combinations | 25,203,490 | ||
Conversion of Stock, Amount Converted | 4,798,271 | ||
Adjustment to Trellis purchase price allocation | 14,300 | ||
Assets acquired and liabilities assumed in business combinations and reverse merger: | |||
Cash | 445,269 | ||
Accounts receivable | 917,205 | 77,505 | |
Prepaid expenses and other current assets | 596,233 | 27,860 | 35,292 |
Fixed assets | 1,326,996 | 2,410 | |
Intangible assets | 3,795,000 | 8,010,000 | |
Goodwill | 25,805,615 | 20,254,309 | |
Accounts payable and accrued liabilities | 805,114 | 1,441,062 | |
Deferred revenue | 549,311 | 31,220 | |
Contingent consideration | $ 604,000 | $ 1,387,000 |
Description of Business, Liquid
Description of Business, Liquidity, and Capital Resources | 6 Months Ended |
Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business, Liquidity, and Capital Resources | Note 1 - Resources Description of Business Akerna Corp., herein referred to as we, us, our or Akerna, through our wholly-owned subsidiaries MJ Freeway, LLC, or MJF, Trellis Solutions, Inc., or Trellis, Ample Organics, Inc, or Ample, o ur commercial software platform, MJ Platform®, and Trellis®, to state-licensed businesses, and our regulatory software platform, Leaf Data Systems®, to state government regulatory agencies. Through Solo, we provide an innovative, next-generation solution for state and national governments to securely track product and waste throughout the supply chain with solo*TAG ™ . ™ We consult with clients on a wide range of areas to help them successfully maintain compliance with state laws and regulations. We provide project-focused consulting services to clients who are initiating or expanding their cannabis business operations or are interested in data consulting engagements with respect to the legal cannabis industry. Our advisory engagements include service offerings focused on compliance requirement assessments, readiness and best practices, compliance monitoring systems, application processes, inspection readiness, and business plan and compliance reviews. We typically provide our consulting services to clients in emerging markets that are seeking consultation on newly introduced licensing regimes and assistance with the regulatory compliant build-out of operations. Fiscal Year-end On September 25, 2020, our Liquidity and Capital Resources Since our inception, we have incurred recurring operating losses, used cash from operations, and relied on capital raising transactions to continue ongoing operations. During the six months ended December 31, 2020, we incurred a loss from operations of $ 15.7 8.9 During this same period, the Company incurred a number of one 1.6 During the six months ended December 31, 2020, we implemented a number of cost reduction initiatives reducing costs and identifying cost savings that we expect to result in annual savings of an additional $ 3.0 4.0 4,400,000 . From February 11, 2021 through March 10, 2021, we issued shares of common stock of Akerna to the holders of Akerna’s convertible notes upon conversion of installment amounts. As of March 31, 2021, the principal balance of the senior secured convertible notes was $ 7.5 million. After considering all available evidence, we determined that, due to our current positive working capital, our ability to repay our senior secured convertible note with shares of our common stock, and our initiatives to reduce operating expenditures, that we have sufficient working capital to sustain operations for a period of at least twelve months from the date that our December 31, 2020 financial statements were issued. Management will continue to evaluate our liquidity and capital resources. From time to time, we may pursue various strategic business opportunities. These opportunities may include investment in or ownership of additional technology companies through direct investments, acquisitions, joint ventures, and other arrangements. We can provide no assurance that we will successfully identify such opportunities or that, if we identify and pursue any of these opportunities, any of them will be consummated. Consequently, we may raise additional equity or debt capital or enter into arrangements to secure the necessary financing to fund the completion of such strategic business opportunities, although no assurance can be provided that we will be successful in completing a future capital raise. The sale of additional equity could result in additional dilution to our existing stockholders, and financing arrangements may not be available to us, or may not be available in sufficient amounts or on acceptable terms. Our future operating performance will be subject to future economic conditions and to financial, business, and other factors, many of which are beyond our control. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 2 Basis of Presentation The accompanying financial statements and related notes reflect the historical results of MJF prior to the mergers completed in , or the Mergers, with MTech Acquisition Corp., or MTech, and other related entities, which resulted in the combined company and do not include the historical results of MTech prior to the completion of the mergers. The Consolidated Financial Statements are presented in accordance with accounting principles generally accepted in the United States, or GAAP, and our reporting currency is the United States Dollar. Principles of Consolidation Our accompanying consolidated financial statements include the accounts of Akerna, our wholly-owned subsidiaries, and those entities in which we otherwise have a controlling financial interest. All significant intercompany balances and transactions have been eliminated in consolidation. We evaluate our ownership interests, contractual rights, and other interests in entities to determine if the entities are variable interest entities or VIEs when we have a variable interest in those entities. Generally, a VIE is a legal entity in which the equity investors do not have the characteristics of a controlling financial interest or the equity investors lack sufficient equity at risk for the entity to finance its activities without additional subordinated financial support. These evaluations can be complex and involve judgment and the use of estimates and assumptions based on available historical information. If we determine that we hold a variable interest in a VIE and we are the primary beneficiary of the VIE, we must consolidate the VIE in our financial statements. In determining whether we are the primary beneficiary of a VIE, we consider qualitative and quantitative factors, including, but not limited to: which activities most significantly impact the VIE’s economic performance and which party controls such activities; the amount and characteristics of our investment; the obligation or likelihood for us or other investors to provide financial support; and the similarity with and significance to our business activities and the business activities of the other investors. Significant judgments related to these determinations include estimates about the current and future fair values and performance of these VIE’s operations and general market conditions. We determine whether we are the primary beneficiary of a VIE upon our initial involvement with the VIE and reassess our status on an ongoing basis. Use of Estimates The preparation of our consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts included in the financial statements and accompanying notes thereto. We base our estimates on assumptions that we believe to be reasonable under the circumstances, the results of which form a basis for making judgments about the carrying value of assets and liabilities that are not readily available from other sources. Actual results could differ from those estimates under different assumptions or conditions; however, we believe that our estimates are reasonable. Cash and Cash Equivalents We consider liquid instruments purchased with an original maturity of three December 31, 2020 June 30, 2020 2019 Restricted Cash Restricted cash consists of funds that are contractually or legally restricted as to usage or withdrawal and is presented separately from cash and cash equivalents on our consolidated balance sheets. Our restricted cash serves as collateral for a letter of credit. Accounts Receivable, Net We maintain an allowance for doubtful accounts equal to the estimated uncollectible amounts based on our historical collection experience and review of the current status of trade accounts receivable. Receivables are written-off and charged against the recorded allowance when we have exhausted collection efforts without success. The allowance for doubtful accounts was $ 0.2 million as of December 31, 2020 June 30, 2020 2019 The allowance for doubtful accounts consists of the following activity: Six Months Ended December 31, Year Ended June 30, 2020 2020 2019 Allowance for doubtful accounts, beginning balance $ 208,422 $ 190,088 $ 39,571 Ad ditions: B ad debt expense 72,832 1,094,507 345,951 Deductions: Write-off uncollectable accounts ( 89,008 ) ( 1,076,173 ) ( 195,424 ) Allowance for doubtful accounts, ending balance $ 192,246 $ 208,422 $ 190,098 Concentrations of Credit Risk We grant credit in the normal course of business to customers in the United States. We periodically perform credit analysis and monitor the financial condition of our customers to reduce credit risk. During the six months ended December 31, 2020 June 30, 2020 2019 one government client accounted for 14 25 % and 30 December 31, 2020 June 30, 2020 June 30, 2019 two government clients accounted f or a total of 36 54 58 of net accounts receivable, respectively. Property and Equipment Property and equipment are recorded at cost. Expenditures for major additions and improvements are capitalized. Depreciation and amortization is provided over the estimated useful lives of the related assets using the straight-line method. The estimated useful lives for significant property and equipment categories are generally as follows: Furniture and computer equipment 3 7 Leasehold improvements Lesser of remaining lease term or useful life Repairs and maintenance costs are expensed as incurred. Equity Method Investments We make strategic investm Intangible Assets Acquired through Business Combinations Intangible assets are amortized over their estimated useful lives. We evaluate the estimated remaining useful life of our intangible assets when events or changes in circumstances indicate an adjustment to the remaining amortization may be needed. We similarly evaluate the recoverability of these assets upon events or changes in circumstances indicate a potential impairment. Recoverability of these assets is measured by comparing the carrying amount of each asset to the future undiscounted cash flows the asset is expected to generate. If the undiscounted cash flows used in the test for recoverability are less than the carrying amount of these assets, the carrying amount of such assets is reduced to fair value. We recorded an impairment of $ 2.7 June 30, 2020 2019 6 Goodwill Impairment Assessment Goodwill represents the excess purchase consideration of an acquired business over the fair value of the net tangible and identifiable intangible assets. Goodwill is evaluated for impairment annually on October 31, and whenever events or changes in circumstances indicate the carrying value of goodwill may not be recoverable. Triggering events that may indicate impairment include, but are not limited to, a significant adverse change in customer demand or business climate or a significant decrease in expected cash flows. An impairment loss is recognized to the extent that the carrying amount exceeds the reporting unit’s fair value, not to exceed the carrying amount of goodwill. The Company has the option to first assess qualitative factors to determine whether events or circumstances indicate that it is more likely than not that the fair value of a reporting unit is less than its carrying amount and determine whether further action is needed. If, after assessing the totality of events or circumstances, the Company determines it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then performing the quantitative impairment test is unnecessary. We recorded an impairment to goodwill of $4.2 million during the six months ended December 31, 2020 June 30, 2020 2019 6 Software Development Costs Costs incurred during the application development stage of a newly developed application and costs we incur to enhance our existing platforms that meet certain criteria are subject to capitalization and subsequent amortization. Capitalized software development costs were approximately $ 2.1 December 31, 2020 3.1 June 30, 2020 ch as payroll and benefits, vendor 2 5 Fair Value of Financial Instruments GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Under this guidance, we are required to classify certain assets and liabilities based on the fair value hierarchy, which groups fair value-measured assets and liabilities based upon the following levels of inputs: ● Level 1 ● Level 2 ● Level 3 The fair value of financial instruments is the amount at which the instrument could be exchanged in a current transaction between willing parties. The carrying values of financial instruments such as accounts receivable, accounts payable and accrued liabilities approximate fair value based on their short maturities. Please refer to Note 12 - Fair Value Measurements for additional Fair Value Option The fair value option provides an election that allows a company to irrevocably elect to record certain financial assets and liabilities at fair value on an instrument-by-instrument basis at initial recognition. We have elected to apply the fair value option to certain convertible notes due to the complexity of the various conversion and settlement options available to both the Note Holders and Akerna. The convertible notes accounted for under the fair value option election are each a debt host financial instrument containing embedded features that would otherwise be required to be bifurcated from the debt-host and recognized as separate derivative liabilities subject to initial and subsequent periodic estimated fair value measurements in accordance with GAAP. Notwithstanding, when the fair value option election is applied to financial liabilities, bifurcation of an embedded derivative is no required, and the financial liability is initially measured at its issue-date estimated fair value and then subsequently remeasured at estimated fair value on a recurring basis as of each reporting period date. The portion of the change in fair value attributed to a change in the instrument-specific credit risk is recognized as a component of other comprehensive income and the remaining amount of the fair value adjustment is recognized as other income (expense) in our consolidated statement of operations. The estimated fair value adjustment is presented in a respective single line item within other income (expense) in the accompanying consolidated statement of operations because the change in fair value of the convertible notes was not attributable to instrument-specific credit risk. Revenue Recognition See Note 3 for further discussion of our revenue recognition policies. Cost of Revenue Cost of revenue consists primarily of costs related to providing subscription and other services to our customers, including employee compensation and related expenses for data center operations, customer support and professional services personnel, payments to outside technology service providers, security services, and other tools. Product Development Product development expenses consist primarily of employee-related costs for the design and development of the Company's platform, contractor costs to supplement staff levels, third-party web services, consulting services, and allocated overhead. Product development expenses, other than software development costs qualifying for capitalization, are expensed as incurred. Sales and Marketing Expenses Sales and marketing expenses con General and Administrative General and administrative expenses consist primarily of personnel and related costs for our executive, finance, legal, human resources, and administrative personnel, including salaries, b nefits, bonuses, and stock-based compensation; legal, accounting, and other professional service fees; other corporate expenses; information technology costs; and facility costs. Legal and Other Contingencies From time to time, the Company may be a party to litigation and subject to claims incident to the ordinary course of business, including intellectual property claims, labor and employment claims, breach of contract claims and other asserted and unasserted claims. The Company investigates these claims as they arise and accrues estimates for resolution of legal and other contingencies when losses are probable and estimable. Stock-Based Compensation We measured stock-based compensation based on the fair value of the share-based awards on the date of grant and recognize the related costs on a straight-line basis over the requisite service period, which is generally the vesting period. Foreign Currency Translation The functional currency of the Company's non-U.S. operations is the local currency. Monetary assets and liabilities denominated in foreign currencies are translated into U.S. dollars at exchange rates prevailing at the balance sheet dates. Non-monetary assets and liabilities are translated at the historical rates in effect when the assets were acquired or obligations incurred. Revenue and expenses are translated into U.S. dollars using the average rates of exchange prevailing during the period. Translation gains or losses are included as a component of accumulated other comprehensive loss in stockholders' equity. Gains and losses resulting from foreign currency transactions are recognized as other income (expense). Reclassifications Certain prior year financial statement amounts have been reclassified for consistency with the current year presentation. Income Taxes Income taxes are accounted for using the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax basis of other assets and liabilities. We provide for income taxes at the current and future enacted tax rates and laws applicable in each taxing jurisdiction. We use a two We recognize deferred tax assets to the extent that its assets are more likely than not to be realized. In making such a determination, we consider all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies, and results of recent operations. If we determine that we would be able to realize our deferred tax assets in the future in excess of its net recorded amount, we will make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes. Segments Our chief operating decision maker reviews financial information presented on a consolidated basis for purposes of allocating resources and evaluating financial performance and information for different revenue streams is not evaluated separately. As such, the Company has one In the following table, we disclosure our long-lived assets by geographical location (in thousands): 2020 2020 2019 Long-lived assets: United States $ 9,994 $ 10,254 $ - Canada 5,074 - - Total $ 15,068 $ 10,254 $ - Recently Issued Accounting Pronouncements The Financial Accounting Standards Board, or the FASB, has issued guidance to revise accounting for revenue from contracts with customers, which supersedes the revenue recognition requirements and industry-specific guidance currently in effect for us. The new revenue standard requires an entity to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration the entity expects to be entitled to in exchange for those goods or services. The new revenue standard allows for either full retrospective or modified retrospective adoption. We adopted the new standard using the modified retrospective approach. Refer to Note 3 The FASB has issued guidance related to the accounting for share-based compensation to , which eliminates the separate accounting model for The FASB has issued new guidance related to the accounting for leases. The new standard establishes a right-of-use model that requires a lessee to record a right-of-use asset and a lease liability on the balance sheet for all leases with terms longer than 12 2022 The FASB has issued guidance to introduce a new model for recognizing credit losses on financial instruments based on estimated current expected credit losses, or CECL. Under the new standard, an entity is required to estimate CECL on trade receivables at inception, based on historical information, current conditions, and reasonable and supportable forecasts. The new guidance is effective for us in our fiscal year beginning in 2023 The FASB has issued guidance regarding when internal-use software development costs should be capitalized or charged to expense. Depending upon the nature of the costs and the project stage in which they are incurred. Capitalized development costs are subject to amortization and impairment guidance consistent with existing internal-use software development cost guidance. The guidance is applicable for us in our fiscal year beginning in 2023 The FASB has issued guidance clarifying the interactions between various standards governing investments in equity securities. The new guidance addresses accounting for the transition into and out of the equity method and measurement of certain purchased options and forward contracts to acquire investments. The standard is effective for us for annual and interim periods in our fiscal year beginning in 2022 |
Revenue
Revenue | 6 Months Ended |
Dec. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Note 3 - Revenue Financial Statement Impact of Adopting ASC 606 On July 1, 2020, we adopted ASC 606 606 The most significant impacts of this standard relate to the timing of revenue recognition of fixed fees under our contracts, as well as the accounting for costs to obtain contracts. Under ASC 606 606 606 The adoption of ASC 606 0.2 0.2 Revenue Recognition Policies for the years ended June 30, 2020 and 2019 We derive our revenues primarily from the following sources: software revenues, which are primarily comprised of subscription fees from government and commercial customers accessing our enterprise cloud computing services and from customers paying for additional support beyond the standard support that is included in the basic subscription fees; and consulting services provided to operators interested in integrating our platform into their respective operations, such services include: assessing compliance requirements, monitoring systems and readiness; assisting with the application process; and evaluating the operator’s inspection readiness and business plan. We commence revenue recognition when there is persuasive evidence of an arrangement, the service has been or is being provided to the customer, the collection of the fees is reasonably assured, and the amount of fees to be paid by the customer is fixed or determinable. Software Revenue Software revenue primarily consists of subscription revenue that is recognized ratably over the term of the contract, beginning when access to the applicable software is provided to the customer. We typically invoice customers at the beginning of the term, in multi-year, annual, quarterly, or monthly installments. When a collection of fees occurs in advance of service delivery, revenue recognition is deferred until such services commence. Revenue for implementation fees is recognized ratably over the expected term of the contract, including expected renewals. We include service level commitments to customers warranting certain levels of uptime reliability and performance and permitting those customers to receive credits if those levels are not met. In addition, customer contracts often include: specific obligations that require us to maintain the availability of the customer’s data through the service and that customer content is secured against unauthorized access or loss, and indemnity provisions whereby we indemnify customers from third-party claims asserted against them that result from our failure to maintain the availability of their content or securing the same from unauthorized access or loss. To date, we have not incurred any material costs as a result of such commitments. Any such credits or payments made to customers under these arrangements are recorded as a reduction of revenue. Consulting Services Revenue Consulting services revenue consists of contracts with fixed terms and fee structures based upon the volume and activity or fixed-price contracts for consulting and strategic services. When these services are not combined with subscription revenues as a single unit of account, as discussed below, these revenues are recognized as services are rendered and accepted by the customer. Other Revenues We sell solo*TAG ™ ™ ™ ™ Cost of Revenue Cost of revenue consists primarily of costs related to providing subscription and other services to our customers, including employee compensation and related expenses for data center operations, customer support and professional services personnel, payments to outside technology service providers, security services, and other tools. Deferred Revenue Deferred revenue consists of payments received in advance of revenue recognition from subscription services. The deferred revenue balance is influenced by several factors, including seasonality, the compounding effects of renewals, contract duration, and invoice frequency. Deferred revenue that will be recognized during the succeeding twelve Revenue Recognition Policies for the six months ended December 31, 2020 In accordance with ASC 606 Disaggregation of Revenue The Company derives the majority of its revenue from subscription fees paid for access to and usage of its SaaS solutions for a specified period of time, typically one 30 one Sales The following table Six Months Ended December 31, 2020 Year Ended June 30, 2020 ( 1 Year Ended June 30, 2019 ( 1 Government $ 1,939 $ 4,906 $ 4,155 Non-government 5,886 7,667 6,668 $ 7,825 $ 12,573 $ 10,823 ( 1 606 historical accounting guidance in effect for those periods. Six Months Ended December 31, 2020 Year Ended June 30, 2020 ( 1 Year Ended June 30, 2019 ( 1 United States $ 5,212 $ 12,573 $ 10,823 Canada 2,613 — — $ 7,825 $ 12,573 $ 10,823 Software Our software revenue is generated from subscriptions and services related to the use of our commercial software platforms, MJ Platform ® , Ample and Trellis sale of business intelligence, data analytics and other software related services. S 30 C onsulting Services. Consulting services revenue is generated by providing solutions for operators in the pre-application of licensures and pre-operational phases of development. These services include application and business plan preparation as they seek licenses to be granted. Consulting projects completed during the pre-application phase generally solidify us as the software vendor of choice for subsequent operational phases once the operator is granted the license. As a result, our consulting revenue is driven as new emerging states pass legislation, and as our client-operators gain licenses. Accordingly, we expect our consulting services to continue to grow as more states emerge with legalization reforms. Other Revenue. Our other revenue is derived primarily from point-of-sale hardware and other non-recurring revenue. Contracts with Multiple Performance Obligations Customers may elect to purchase a subscription to multiple modules, multiple modules with multiple service levels, or, for certain of the Company's solutions. We evaluate such contracts to determine whether the services to be provided are distinct and accordingly should be accounted for as separate performance obligations. If we determine that a contract has multiple performance obligations, the transaction price, which is the total price of the contract, is allocated to each performance obligation based on a relative standalone selling price method. We estimate standalone selling price based on observable prices in past transactions for which the product offering subject to the performance obligation has been sold separately. As the performance obligations are satisfied, revenue is recognized as discussed above in the product descriptions. Transaction Price Allocated to Future Performance Obligations ASC 606 twelve one one 1.2 0.8 twelve Deferred Revenue Deferred revenue represents the unearned portion of subscription and implementation fees. Deferred revenue is recorded when cash payments are received in advance of performance. Deferred amounts are generally recognized within one As of July 1, 2020 (adjusted) Net additions Revenue recognized As of December 31, 2020 Deferred revenue $ 369 8,300 ( 7,825 ) $ 844 Of the $ 7.8 0.4 Costs to Obtain Contracts In accordance with ASC 606 , we now capitalize sales commissions that are directly related to obtaining customer contracts and that would not have been incurred if the contract had not been obtained. These costs are included in the accompanying consolidated balance sheets and are classified as Prepaid expenses and other current assets. Deferred contract costs are amortized to sales and marketing expense over the expected period of benefit, which we have determined to be one year based on the estimated customer relationship period. The following table summarizes deferred contract cost activity for the six months ended December 31, 2020 (in thousand): As of July 1, 2020 (adjusted) Additions Amortized costs ( 1 As of December 31, 2020 Deferred contract costs $ 186 271 ( 229 $ 228 ( 1 |
Significant Transactions
Significant Transactions | 6 Months Ended |
Dec. 31, 2020 | |
Significant Transactions [Abstract] | |
Significant Transactions | Note 4 Business Combinations Trellis Solutions, Inc. On April 8, 2020, we acquired Trellis, a cannabis cultivation management and compliance software company in an all-stock transaction Our estimated acquisition date fair value of the consideration transferred for Trellis was as follows (in thousands): Common shares issued $ 2,531 Cont ingent consid 998 Total estimated fair value of consideration $ 3,529 We incurred $ 0.1 of transaction costs directly related to the acquisition that is reflected in general and administrative expenses in our consolidated statement of operations during the year ended June 30, 2020. We issued 349,650 shares of our common stock valued at $ 7.24 100 We have also agreed to pay additional consideration calculated as annualized revenue derived from previously identified customers for the month of September 2020 multiplied by five 20 0 1.0 The following table summarizes our estimated fair values of assets acquired and liabilities assumed as of the date of acquisition (in thousands): Cash $ 21 Accounts receivable, net 91 Other assets 6 Acquired technology 210 Acquired trade name 80 Customer relationships 220 Goodwill 3,216 Accounts payable and accrued expenses ( 284 ) Deferred revenue ( 31 ) Net assets acquired $ 3,529 The excess of purchase consideration over the fair value of net tangible and intangible assets acquired was recorded as goodwill, which is primarily attributed to the assembled workforce and expanded market opportunities, for which there is no basis for U.S. income tax purposes. During the six months ended December 31, 2020, we recorded net adjustments to assets and liabilities acquired of $ 14,300 216,000 17,000 solo sciences, inc. On January 15, 2020, we closed on a stock purchase agreement with substantially all of the shareholders of Solo pursuant to which we acquired all right, title, and interest in 80.4 17.9 2020 Common shares issued $ $ 17,550 Contingent considerat 389 Total estimated fair value of consideration $ 17,939 We incurred $ 0.3 We exchanged 1,950,000 9.00 In addition to the stock consideration, we agreed to pay contingent consideration in the form of fees payable to the legacy Solo shareholders equal to the lesser of (i) $ 0.01 ™ and solo*CODE ™ sold or (ii) 7 The fees were to be paid annually until the earlier of: ( 1 12 20 30 ™ and solo*CODE ™ , which is December 1, 2029. This fee represents contingent consideration and was recorded at fair value as of the date of acquisition. Contingent consideration is adjusted to fair value each period with changes in fair value being recognized in earnings at each reporting period. We also acquired an option to acquire the interests in Solo during the 12 interests in Solo have a 3 40 55 800,000 We recorded a gain on settlement of the contingent consideration liability during the six months ended December 31, 2020 in general and administrative expenses in our consolidated statement of operations. During the quarter ended June 30 2020 The following table summarizes the preliminary estimated fair values of assets acquired and liabilities assumed as of the date of acquisition (in thousands): Cash $ 101 Prepaid expenses and other assets 22 Furniture, fixtures, and equipment 2 Acquired technology 7,160 Acquired trade name 340 Goodwill 17,025 Accounts payable and accrued liabilities ( 1,158 ) Fair value of noncontrolling interests ( 5,553 ) Net assets acquired $ 17,939 The excess of purchase consideration over the fair value of net tangible and intangible assets acquired was recorded as goodwill, which is primarily attributed to expanded market opportunities, for which there is no basis for U.S. income tax purposes. 23,000 and $ 1,471,000 , respectively. During the six months ended December 31, 2020, the Company recorded an impairment of $2.7 million related to Solo’s developed technology. See Note 6 Ample Organics On July 7, 2020, we completed the acquisition of Ample Organics (“Ample”), Ample provides a seed-to-sale platform to clients in Canada, which offers tracking, reporting, and compliance tools to cannabis cultivators, processors, sellers, and clinics. We acquired 100 3.3 one one one 7.65 30.7 5.5 10,000,000 12 9,000,000 6.67 9,000,000 12 Preliminary Exchangeable shares issued $ 25,203 Cash 5,724 Contingent consideration 604 Total preliminary fair value of consideration transferred 31,531 We incurred $ 2.9 , of which $ 1.1 1.8 and the year ended June 30, 2020, respectively The following table summarizes the preliminary fair values of assets acquired and liabilities assumed as of the date of acquisition (in thousands): Preliminary Cash $ 445 Accounts receivable 917 Prepaid expenses and other current assets 595 Acquired technology 850 Customer relationships 2660 Acquired trade name 285 Goodwill 25,806 Furniture, fixtures and equipment 1,327 Accounts payable and accrued expenses ( 805 ) Deferred revenue ( 549 ) Net assets acquired $ 31,531 The excess of purchase consideration over the preliminary fair value of assets acquired and liabilities assumed was recorded as goodwill, which is primarily attributed to the assembled workforce and expanded market opportunities, for which there is no basis for U.S. income tax purposes. We will continue to monitor the treatment for Candian tax purposes and record any necessary adjustments no later than one one During the six months ended December 31, 2020, the Company recorded an impairment to goodwill for $ 4.2 6 The amounts of Ample’s revenue and net income included in our consolidated statement of operations from the acquisition date of July 7, 2020, to December 31, 2020 were $ 2.6 0.1 Pro Forma Financial Information The following unaudited pro forma financial information summarizes the combined results of operations for Akerna, Trellis, Solo, and Ample 2019 (in thousands): Six Months Ended Year Ended June 30 Year Ended June 30 2020 2020 2019 Revenue $ 7,825 $ 18,314 $ 19,038 Net loss $ ( 16,095 ) $ ( 21,412 ) $ ( 27,242 ) The pro forma financial information for all periods presented above has been calculated after adjusting the results of Solo, Trellis, and Ample to reflect the business combination accounting effects resulting from this acquisition, including the amortization expense from acquired intangible assets as though the acquisition occurred as of the beginning of the Company's fiscal year 2019 . The pro forma financial information is for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisition had taken place at the beginning of the Company's fiscal 2019 Special Voting Preferred Stock and Exchangeable Shares In connection with the Ample acquisition, we entered into agreements with our wholly-owned subsidiary and the Ample shareholder representative that resulted in the issuance of a single share of our special voting preferred stock, for the purpose of ensuring that each Exchangeable Share is substantially the economic and voting equivalent of a share of Akerna common stock, and, following the registration of the Akerna shares issuable upon exchange of the Exchangeable Shares under the Securities Act of 1933 , ensuring that each Exchangeable Share is exchangeable on a one -for- one basis for a share of Akerna common stock, subject to certain limitations. As a result of these agreements and the issuance of the special voting preferred stock, each holder of Exchangeable Shares effectively has the ability to cast votes along with holders of Akerna common stock. Additionally, these agreements grant exchange rights to the holders of exchangeable shares upon the event of our liquidation, dissolution or winding up. The special voting preferred stock has a par value of $ 0.0001 1.00 . The special voting preferred stock entitles the holder to an aggregate number of votes equal to the number of the exchangeable shares issued and outstanding from time to time and which we do not own. The holder of the special voting preferred stock and the holders of shares of Akerna common stock will both together as a single class on all matters submitted to a vote of our shareholders. At such time as the special voting preferred stock has not votes attached to it, the share shall be automatically cancelled. The exchangeable shares do not have a par value. On September 1, 2020, several Ample shareholders exchanged a total of 627,225 exchangeable shares with a value of $ 4,798,271 for the same number of shares of Akerna common stock. The exchange was accounted for as an equity transaction and we did not recognize a gain or loss on this transaction. As of December 31, 2020, there were a total of 2,667,349 Exchangeable Shares issued and outstanding. |
Balance Sheet Disclosures
Balance Sheet Disclosures | 6 Months Ended |
Dec. 31, 2020 | |
Balance Sheet Disclosures [Abstract] | |
Balance Sheet Disclosures | Note 5 - Balance Sheet Disclosures Prepaid expenses and other current assets consisted of the following: As of December 31 As of June 30 2020 2020 2019 Software and technology $ 480,651 $ 571,695 $ 237,930 Professional services, dues and subscriptions 826,195 473,731 169,804 Insurance 243,222 105,814 159,940 Deferred contract costs 227,718 — — Unbilled re ceivab 612,446 — — Other 68,495 64,101 10,000 Total prepaid expenses and other current assets $ 2,458,727 $ 1,215,341 $ 577,674 Accounts payable and accrued liabilities consisted of the following As of December 31 As of June 30, 2020 2020 2019 Accounts payable $ 513,610 $ 1,443,895 $ 1,317,566 Professional fees 333,709 2,273,659 49,205 Sales taxes 216,367 59,825 36,358 Compensation 311,379 260,042 354,724 Contractors 1,281,857 782,366 19,557 Other 531,654 42,141 40,706 Total accounts payable and accrued liabilities $ 3,188,576 $ 4,861,928 $ 1,818,116 |
Goodwill and Intangible Assets,
Goodwill and Intangible Assets, Net | 6 Months Ended |
Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets, Net | Note 6 - Goodwill and Intangible Assets, Net Goodwill The following table reflects the changes in the carrying amount of goodwill: Balance as of June 30, 2019 $ — Additions due to acquisitions 20,254,309 B alance as $ 20,254,309 Adjustments to Trellis' goodwill ( 14,300 Additions due to acquisition of Ample 25,806,518 Goodwill impairment related to Ample ( 4,172,000 B alance December 31, 2020 $ 41,874,527 Impairment We elected to bypass the qualitative assessment of our goodwill and performed a quantitative valuation of goodwill during the fourth quarter of fiscal 2020 (the “annual impairment test”). We determined there were two reporting units: the Akerna reporting unit which is comprised of Akerna and the Trellis and Solo acquisitions, and the Ample reporting unit. The valuation of our goodwill was determined with the assistance of an independent valuation firm using the income approach (discounted cashflows method) and the market approach (guideline public company method). Our significant assumptions in these analyses include, but are not limited to, future cash flow projections, the weighted average cost of capital, the terminal growth rate, and the tax rate. The Company’s estimates of future cash flows are based on current regulatory and economic climates, recent operating results, and planned business strategies. These estimates could be negatively affected by changes in federal, state, or local regulations or economic downturns. Future cash flow estimates are, by their nature, subjective and actual results may differ materially from the Company’s estimates. If the Company’s ongoing estimates of future cash flows are not met, the Company may have to record additional impairment charges in future periods. The Company also uses the Guideline Public Company Method, a form of the market approach (utilizing Level 3 unobservable inputs), which is derived from metrics of publicly traded companies or historically completed transactions of comparable businesses. The selection of comparable businesses is based on the markets in which the reporting units operate giving consideration to risk profiles, size, geography, and diversity of products and services. As such, we believe the current assumptions and estimates utilized are both reasonable and appropriate. Akerna Reporting Unit For the Akerna reporting unit, we applied a 100 Ample Reporting Unit For the Ample reporting unit, we applied a 50 50 4.2 Finite-lived Intangible Assets, Net As noted above, we performed a qualitative and quantitative analysis of our intangible assets during our annual impairment test. As a result of the quantitative analysis, it was determined that the carrying value of Solo’s developed technology and trade name exceeded it’s fair value, resulting in an impairment of $ 2.7 Intangible assets as of December 31, 2020 Weighted average remaining amortization period (in years) Gross Accumulated amortization Impairment Net carrying amount Acquired developed technology 3.77 $ 8,220,000 $ ( 1,434,155 ) ( 2,591,920 ) $ 4,193,925 Acquired trade names 5.12 705,000 ( 97,676 ) ( 123,080 ) 484,244 Customer relationships 13.04 2,880,000 ( 169,374 ) — 2,710,626 Other intangible assets, not yet placed into service N/A — — — — Total Intangible assets $ 11,805,000 $ ( 1,701,205 ) ( 2,715,000 ) $ 7,388,795 Capitalized software - In-service 1.62 4,593,512 ( 1,401,953 ) — 3,191,559 Capitalized software - Work in Progress N/A 734,180 — — 734,180 Total Capitalized Software 5,327,692 ( 1,401,953 ) — 3,925,739 Total finite-lived intangible assets $ 17,132,692 $ ( 3,103,158 ) ( 2,715,000 ) $ 11,314,534 Intangible assets as of June 30, 2020 consist of the following: Weighted average remaining amortization period (in years) Gross carrying amount Accumulated amortization Net carrying amount Acquired developed technology 4.42 $ 7,370,000 $ ( 679,696 ) $ 6,690,304 Acquired trade names 7.40 420,000 ( 23,248 ) 396,752 Customer relationships 1.75 220,000 ( 24,475 ) 195,525 Other intangible assets, not yet placed into service N/A 211,394 — 211,394 Total Intangible assets $ 8,221,394 $ ( 727,419 ) $ 7,493,975 Capitalized software - In-service 1.86 2,852,044 ( 560,528 ) 2,291,516 Capitalized software - Work in Progress N/A 337,788 — 337,788 Total Capitalized Software 3,189,832 ( 560,528 ) 2,629,304 Total finite-lived intangible assets $ 11,411,226 $ ( 1,287,947 ) $ 10,123,279 We record amortization expense associated with acquired developed technology, acquired trade names, and customer relationships. The amortization expense of all finite-lived intangible assets, which includes capitalized software was $ 1.8 1.3 for the six months ended December 31, 2020 a nd year ended June 30, 2020, respectively. We did not have amortization during the year ended June 30, 2019. As of December 31, 2020, expected amortization expense relating to in-service capitalized software and purchased intangible assets for each of the next five follows: Acquired Intangible Assets Capitalized Software- In-service 2021 $ 1,656,991 $ 2,040,462 2022 1,501,654 908,094 2023 1,239,864 105,498 2024 1,036,991 94,463 2025 243,436 43,042 Thereafter 1,709,859 — Tota $ 7,388,795 $ 3,191,559 |
Fixed assets, net
Fixed assets, net | 6 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Fixed assets, net | Note 7 Fixed assets consisted of the following: As of As of June 30, 2020 2020 Furniture and computer equipment $ 131,300 $ 73,048 Leasehold improvements 1,175,556 85,998 1,306,856 159,046 Less: accumulated depreciation ( 113,423 ( 27,951 Fixed assets, net $ 1,193,433 $ 131,095 Depreciation expense for the six months ended December 31, 2020 and for the year ended June 30, 2020 was $ 240,743 27,951 25,561 191,389 106,555 59,273 |
Equity Method Investment and Re
Equity Method Investment and Related Party Transaction | 6 Months Ended |
Dec. 31, 2020 | |
Investments [Abstract] | |
Equity Method Investment and Related Party Transaction | Note 8 Investment in and License Agreement with Zol Solutions, Inc. On October 7, 2019, we participated in an offering of preferred stock of Zol Solutions, Inc. (“ZolTrain”) along with other investors in which we purchased 203,000 250,000 The ZolTrain Preferred is convertible into shares o f common stock of ZolTrain at a conversion rate of $ 1.232 The ZolTrain Preferred also provides us with rights of first refusal with respect to newly issued securities of ZolTrain as well as issued and outstanding securities of ZolTrain that are offered to third parties. In connection with the agreement, Nina Simosko, our Chief Revenue Officer, was appointed as one of three members of ZolTrain’s board of directors. Ms. Simosko may only be removed from the ZolTrain board by us and we retain the right to fill the vacancy. We have determined that ZolTrain is a VIE for accounting purposes. However, we are not required to consolidate ZolTrain in our financial statements because we are not ZolTrain’s primary beneficiary. As of December 31, 2020, our maximum exposure to loss was equal to the carrying value of our initial investment of $ 250,000 For the six months ended December 31, 2020 we have recognized equity in loss of investee of $ 16,336 which represents our share of ZolTrain's losses since our investment. Subsequent to our investment, we entered into a nonexclusive license/reseller agreement with ZolTrain, effective October 24, 2019, to provide ZolTrain’s online cannabis training platform as a co-branded integration option into our MJ Platform and Leaf Data Systems, which is a related party transaction. ZolTrain will share subscription-based revenue generated from our customers with us. The amount of the share of the revenue for each of us and ZolTrain will depend on both (a) the number of training modules accessed by a customer and (b) which party created the accessed content. In addition to the revenue sharing arrangement, the license/reseller agreement provides us with the right to receive additional consideration from ZolTrain in the form of an equity earnout if certain revenue milestones are achieved during 2020 2021 2022 and the years ended June 30, 2020 and 2019 |
Long Term Debt
Long Term Debt | 6 Months Ended |
Dec. 31, 2020 | |
Line of Credit Facility [Abstract] | |
Long Term Debt | Note 9 Long-term debt consisted of the following at December 31, 2020: Convertible Notes (at fair value) $ 13,398,000 PPP loan 2,204,600 Subtotal 15,602,600 Less: current maturities ( 11,707,363 ) Total long-term debt, less current portion $ 3,895,237 Senior Secured Convertible Notes On June 8, 2020, we entered into a Securities Purchase Agreement, or SPA, with two institutional investors, or the Note Holders, to sell a new series of senior secured convertible notes, or the Convertible Notes, of Akerna in a private placement to the Note Holders, in the aggregate principal amount of $ 17.0 million 12 %, and ranking senior to all outstanding and future indebtedness of Akerna. The Convertible Notes were sold on June 9, 2020, with an original issue discount pursuant to which the Note Holders paid $ 880 per each $ 1,000 in principal amount of the Convertible Notes. The Convertible Notes do not bear interest except upon the occurrence of an event of default, in which event the applicable rate will be 15.00 % per annum. Pursuant to the SPA and the Convertible Notes, we and certain of its subsidiaries will enter into a Security and Pledge Agreement (the “ Security Agreement Collateral Agent Collateral Under the Security Agreement we agree to certain conditions on its maintenance and use of the Collateral, including but not limited to the location of equipment and inventory, the condition of equipment, the payment of taxes and prevention of liens or encumbrances, the maintenance of insurance, the protection of intellectual property rights, and limitations on transfers and sales. Upon the occurrence of an “Event of Default” under the Security Agreement, the Collateral Agent will have certain rights under the Security Agreement including taking control of the Collateral and, in certain circumstances, selling the Collateral to cover obligations owed to the holders of the Convertible Notes pursuant to its terms. “Event of Default” under the Security Agreement means (i) any defined event of default under any one The Convertible Notes mature on June 1, 2023, are payable in installments beginning on October 1, 2020, and may not be prepaid. The Convertible Notes are convertible at any time, at the election of the Holders and subject to certain limitations, into shares of common stock at a rate equal to the amount of principal, interest, if any, and unpaid late charges, if any, divided by a conversion price of $ 11.50 . In connection with the occurrence of an event of default, the Holders of the Convertible Notes will be entitled to convert all or any portion of the Convertible Notes at an alternate conversion price equal to the lower of (i) the conversion price then in effect, or (ii) 80 % of the lower of (x) the volume-weighted average price, or VWAP, of the common stock as of the trading day immediately preceding the applicable date of determination, or (y) the quotient of (A) the sum of the VWAP of the common stock for each of the two trading days with the lowest VWAP of the common stock during the ten ( 10 ) consecutive trading day period ending and including the trading day immediately prior to the applicable date of determination, divided by (B) two , but not less than $ 1.92 . We have elected to use the fair value option to account for the Convertible Notes. T he fair value of the Convertible Notes on issuance was recorded as $ 15.0 decreased 0.8 a decrease 0.1 a decrease 0.7 14.1 During the six months ended December 31, 2020, we made $ 1.8 1.5 0.3 1.0 0.1 0.9 13.4 Amendment On December 23, 2020, we entered into waivers with all the Holders of its Convertible, pursuant to which we and the Holders, separately and not jointly, agreed to waive certain terms and conditions of the Convertible Notes as follows: The Holders irrevocably waived the last sentence of Section 8 We irrevocably waived the prohibition on acceleration of installment amounts in Section 8 one We and the Holders agreed that we may irrevocably waive the installment scheduled principal amount for any installment date by setting forth in the installment notice for that installment date an installment amount greater than the installment scheduled principal amount due and payable on the next installment date. Each Holder may then consent to all or a portion of such increased installment amount for such installment date on the trading day immediately prior to such installment date. Any increased amount for an installment amount above the installment scheduled principal amount for such installment date will reduce the principal amount under the Convertible Notes. · In relation to the January 4, 2021 installment amount, the Company delivered installment notices to the Holders increasing the installment amount for January 4, 2021, in the aggregate, by $ 2,062,500 . Paycheck Protection Program Loan In April 2020, we were granted a loan, or the PPP Loan, from a lender in the aggregate amount of $ 2.2 1.0 six two 20 20 18 seven We are accounting for the PPP Loan as a liability and accrue interest expense using the effective interest method. The aggregate scheduled maturities of outstanding long-term debt obligations in subsequent years are as follows: Year ending December 31, 2021 $ 11,707,363 2022 5,669,965 Aggregate maturities 17,377,328 Original issue discount on Convertible Notes ( 2,040,000 ) Unrealized change i n fair value of Convertible Note 265,272 Long term debt outstanding as of December 31, 2020 $ 15,602,600 |
Reverse Merger
Reverse Merger | 6 Months Ended |
Dec. 31, 2020 | |
Reverse Merger | |
Reverse Merger | Reverse Merger On June 17, 2019, and MJF consummated the Mergers contemplated by the Merger Agreement dated October 10, 2018, as amended. In connection with the closing of the Mergers, we changed our name from Acquisition Holdings . to Corp . The Merger consideration was paid through the issuance of 6,520,099 shares of our common stock (the “Consideration Shares”) to the former holders of MJF common units, preferred units, and profit interest units at a price equal to $ 10.16 per share. We allocated 283,010 fully vested shares of common stock and 215,063 shares of unvested restricted stock were allocated to the former holders of MJF profit interest units, which were accounted for as share-based compensation, resulting in the recognition of approximately $ 3.4 2.1 3 |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
Stockholders' Equity | Note 10 Common and Preferred Stock Upon the closing of the Merger, our one 75,000,000 0.0001 We also entered into a series of securities purchase agreements with certain investors (the “PIPE Investors”), whereby we 901,074 9.2 one one The proceeds received from the Mergers totaled approximately $ 18 4.4 underwriting discounts and commissions and other expenses related to the Mergers. We also have 5,000,000 0.0001 one On October 30, 2020, we issued 5,000,000 shares, at a price of $ 2.40 per share, of Akerna common stock in a public offering for gross proceeds of $ 12.0 million, offset by offering costs of approximately$ 1.0 million for net proceeds $ 11.0 million dollars. Warrants In connection with MTech’s initial public offering, we sold 5,750,000 10.00 750,000 one one one 11.50 one one A summary of the status of common stock warrants is presented in the following table: Shares Issuable Under Warrants Weighted-average Exercise Price Weighted Average Remaining Life Aggregate Intrinsic Value Outstanding at June 30, 2019 6,183,115 $ 11.50 4.97 $ 2,473,000 Issued — — — — Exercised ( 369,311 ) — — — Expired/canceled — — — — Outstanding at June 30, 2020 5,813,804 $ 11.50 3.97 $ — Issued — — — — Exercised — — — — Expired/canceled — — — — Outstanding at December 31, 2020 5,813,804 $ 11.50 3.37 $ — There was no aggregate intrinsic value for the warrants outstanding as of December 31, 2020 and June 30, 2020. |
Stock-Based Compensation
Stock-Based Compensation | 6 Months Ended |
Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Note 11 Restricted Shares and Restricted Stock Units On June 17, 2019, our stockholders considered and approved the 2019 Plan, 1,040,038 Incentive 525,000 1,565,038 We grant restricted stock units, or RSUs, that are subject to time-based vesting and require continuous employment, typically over a period of four from the grant date or the first day of the service period. Prior to the Mergers, MJF had Profit Interest Incentive Plan in place whereby it could grant Profits Interest Units, or PIUs, to employees or consultants and other independent advisors of the Company. PIUs granted under the Profits Interest Plan would generally vest once a year over four We determined the PIUs represented a profit-sharing compensation arrangement that had value only upon a defined liquidating event. Accordingly, no value was accrued for the PIUs prior to the Mergers on June 17, 2019, which met the definition of a liquidating event. As a result, we recorded a one $ 3.4 million A summary of our unvested Restricted Shares and activity is presented in the table below: Restricted Shares Restricted Stock Units Total Weighted Average Grant Date Fair Value Unvested as of June 30, 2019 215,063 — 215,063 $ 11.99 Granted — 571,229 571,229 7.24 Vested ( 88,659 ) ( 26,965 ) ( 115,624 ) 7.25 Forfeited ( 54,091 ) ( 78,470 ) ( 132,561 ) 10.83 Unvested as of June 30, 2020 72,313 465,794 538,107 $ 6.56 Granted — 429,974 429,974 4.88 Vested ( 8,024 ) ( 157,350 ) ( 165,374 ) 5.08 Forfeited — ( 43,906 ) ( 43,906 ) 6.83 Unvested as of December 31, 2020 64,289 694,512 758,801 6.77 For the six months ended December 31, 2020 June 30, 2020 1.3 1.3 December 31, 2020 June 30, 2020 $ 0.1 million and $ 0.1 4.4 December 31, 2020 3.1 |
Loss Per Share
Loss Per Share | 6 Months Ended |
Dec. 31, 2020 | |
Earnings Per Share [Abstract] | |
Loss Per Share | Note 12 Per Share D uring the six months ended December 31, 2020, we used the two -class method to compute net loss per share because we issued securities other than common stock that is economically equivalent to a common share in that the class of stock has the right to participate in dividends should a dividend be declared payable to holders of Akerna common stock. These participating securities were the Exchangeable Shares issued by our wholly owned subsidiary in exchange for interest in Ample. The two -class method requires earnings for the period to be allocated between common stock and participating securities based on their respective rights to receive distributed and undistributed earnings. Under the two -class method, for periods with net income, basic net income per common share is computed by dividing the net income attributable to common stockholders by the weighted average number of shares of common stock outstanding during the period. Net income attributable to common stockholders is computed by subtracting from net income the portion of current period earnings that the participating securities would have been entitled to receive pursuant to their dividend rights had all of the period's earnings been distributed. No such adjustment to earnings is made during periods with a net loss, as the holders of the Exchangeable Shares have no obligation to fund losses. Diluted net loss per common share is calculated under the two We two The weighted-average number of shares outstanding used in the computation of diluted earnings per share does not include the effect of potential outstanding common shares that would have been anti-dilutive for the period. The table below details potentially outstanding shares on a fully diluted basis as of December 31, 2020 December 31, 2020 June 30, 2020 June 30, 2019 Shares issuable upon exchange of Exchangeable Shares 2,667,349 — — Warrants 5,813,804 5,813,804 6,183,115 Restricted Stock Units 694,512 325,121 — Restricted Stock Awards 64,289 75,654 215,063 Shares of common stock issuable in upon conversion of Convertible Notes 1,319,368 1,936,845 — Total 10,559,322 8,151,424 6,398,178 |
Fair Value
Fair Value | 6 Months Ended |
Dec. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value | Note 13 - Fair Value Contingent Consideration Solo I n connection with our acquisition of Solo, the Solo selling shareholders have the potential to earn the contingent consideration, which is calculated as the lesser of (i) $ 0.01 TM and solo*CODE TM sold or (ii) 7 1 12 20 30 TM and solo*CODE TM , which is December 1, 2029. We utilized a Monte Carlo simulation model, which incorporates significant inputs that are not observable in the market, and thus represents a Level 3 We record the fair value of the liability in the consolidated balance sheets under the caption “current contingent consideration” and recognize changes to the liability against earnings or loss each reporting period until settlement. The fair value of the contingent consideration on the date of the acquisition of Solo was $ 389,000 . In connection with our exercise of the option to acquire the remaining interest in Solo, the selling shareholders agreed to retrospectively and prospectively relieve the contingent consideration obligation. Therefore, the settled value of the contingent consideration was $ 0 389,000 December 31, 2020 Trellis In connection with our acquisition of Trellis, the Trellis selling shareholders have the potential to earn contingent consideration, which is calculated as five s $ 998,000 . T June 30, 2020 as $ 0 . We 998,000 June 30, 2020 Ample In addition to the stock and cash consideration, the agreement provides for contingent consideration of up to CAD$ 10,000,000 , payable in exchangeable shares, payable if Ample's Recurring Revenue recognized during the 12 months after the acquisition date is CAD$ 9,000,000 or more. The contingent consideration amount is reduced by an amount equal to the product of CAD$ 6.67 9,000,000 twelve We record the fair value of the liability in the consolidated balance sheets as contingent consideration payable and recognize changes to the liability against earnings or loss in general and administrative expenses in the consolidated statements of operations. The fair value of the contingent consideration on the date of the acquisition of Ample was $ 604,000 December 31, 2020 is $ 0 . We have recorded a gain of $ 604,000 due the change in the fair value of the contingent consideration during the six months ended December 31, 2020 We valued the contingent consideration using a probability-weighted discounted cash flow model, which incorporates inputs that are not observable in the market and thus represents a Level 3 measurement as defined in GAAP. The unobservable inputs utilized for measuring the fair value of the contingent consideration reflect management's own assumptions about the assumptions that market participants would use in valuing the contingent consideration as of the valuation date, as well as our knowledge of specific transactions that effect the calculation. Fair Value Option Election – Convertible Notes We issued Convertible Notes with a principal amount of $ 17.0 15.0 For the Convertible Notes, which are measured at fair value categorized within Level 3 December 31, 2020 Beginning fair value balance on issue date - June 9, 2020 $ 14,960,000 Change in fair value reported in the statements of operations ( 766,000 ) Change in fair value reported in other comprehensive income ( 63,000 ) Ending fair value balance - June 30, 2020 $ 14,131,000 Payments on Convertible Notes ( 1,827,273 ) Change in fair value reported in the statements of operations 961,273 Change in fair value reported in other comprehensive income 133,000 Ending fair value balance - December 31, 2020 $ 13,398,000 The estimated fair value of the Convertible Notes as of December 31, 2020 June 30, 2020 3 We determined the fair value by using the following key inputs to the Monte Carlo Simulation Model: Fair Value Assumptions - Convertible Notes December 31, 2020 June 30, 2020 June 30, 2019 Face value principal payable $ 15,172,272 $ 17,000,000 $ 17,000,000 Original conversion price $ 11.5 $ 11.5 $ 11.5 Value of Common Stock $ 3.24 $ 8.8 $ 10.28 Expected term (years) 2.3 2.9 3 Volatility 77 % 45 % 45 % Market yield (range) 27.1 27.2 % 23.9 % 23.3 23.4 % Risk free rate 0.1 % 0.2 % 0.2 % |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 14 - Commitments and Contingencies Operating Leases We lease facilities and vehicles under non-cancelable operating leases in Canada. Rent expense for the six months ended December 31, 2020, the years ended June 30, 2020 and 2019 552,861 299,629 151,458 Future minimum lease payments under these leases are as follows (in thousands): 2021 $ 416 2022 415 2023 444 2024 447 2025 490 2026 1,031 Total $ 3,243 In December 2020, we reached an agreement to terminate our office lease in Denver, CO. The lease termination agreement included the forfeiture of our $ 41,250 402,480 113,375 3.55 2021 Letter-of-Credit As of December 31, 2020, June 30, 2020, and 2019 500,000 500,000 Litigation On December 4, 2020, TechMagic USA LLC filed suit against our wholly-owned subsidiary, Solo, in Massachusetts Superior Court, Department Business Litigation, seeking recovery of up to approximately $ 1.07 392,000 one 0.6 From time to time, the Company may be involved in litigation relating to claims arising out of its operations in the normal course of business. The Company will accrue a liability for such matters when it is probable that a liability has been incurred and the amount can be reasonably estimated. When only a range of possible losses can be established, the most probable amount in the range is accrued. If no amount within this range is a better estimate than any other amount within the range, the minimum amount in the range is accrued. The accrual for a litigation loss contingency might include, for example, estimates of potential damages, outside legal fees, and other directly related costs expected to be incurred. As of December 31, 2020, June 30, 2020 and 2019 Employee Benefit Plan We have a 401 Employees may contribute up to a portion of their annual compensation to the Plan, limited to a maximum annual amount as updated annually by the IRS. |
Income Taxes
Income Taxes | 6 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 15- Income Taxes We are the sole owner of MJF as of June 17, 2019, which is a disregarded entity for federal income taxes. Prior to June 17, 2019 MJF was treated as a partnership for U.S income tax purposes. Accordingly, prior to the business combination, our taxable income and losses were reported on the income tax returns of MJF’s members. Therefore, no income tax is provided prior to June 17, 2019. On March 27, 2020 the Coronavirus Aid, Relief and Economic Security Act, or the CARES Act, was enacted in response to the COVID- 19 The accounting for the business combination of Ample reflected in the accompanying financial statements is preliminary and is based upon estimates and assumptions that are subject to change within the measurement period (up to one In April 2020, we were granted a loan, or the PPP Loan, from a lender in the aggregate amount of $ 2.2 million pursuant to the Paycheck Protection Program under the Coronavirus Aid, Relief, and Economic Security Act, or the CARES Act. As of December 31, 2020, debt forgiveness has not been obtained and we are accounting for the PPP Loan as a liability and accrue interest expense using the effective interest method. The following table sets forth the expense or (benefit) for income taxes: December 31, June 30, 2020 2020 2019 Income tax expense Current income taxes U.S. federal $ — $ 30,985 $ — U.S. state 200 — — Total current income taxes $ 200 $ 30,985 $ — December 31, June 30, 2020 2019 2020 2019 Deferred income taxes U.S. federal $ — $ — $ — $ — U.S. state — — — — Total deferred income tax benefit $ — $ — $ — $ — The following table sets forth reconciliations of the income tax expense at the statutory federal income tax rate to actual expense based on income or loss before income taxes: December 31, June 30, 2020 2020 2019 Income tax expense attributable to: Federal $ ( 3,560,998 ) $ ( 3,255,706 ) $ ( 2,509,246 ) State, net of federal benefit ( 553,871 ) ( 862,690 ) ( 13,452 ) Foreign tax rate differential 29,617 ( 2,645 ) — Permanent differences 1,263,151 312,525 — Rate change 60,220 — — Restricted stock awards — — 816,505 Changes in valuation allowance 2,762,081 3,884,440 85,455 Provision to return adjustment — ( 45,134 ) — Losses from flow-through entity not subject to tax — — 1,640,066 Other adjustments — 195 ( 19,328 ) Effective income tax expense $ 200 $ 30,985 $ — December 31, 2020 June 30, 2020 2020 2019 Noncurrent deferred tax assets: Employee compensation $ 679,106 $ 378,003 $ — Debt issuance costs 343,612 323,183 — Revenue recognition — 156,022 22,226 Settlement accrual 182,896 — — Fixed assets 831,196 — — Federal and state net operating loss 6,337,897 4,082,297 63,229 Foreign net operating loss 2,586,671 258,083 — Other 27,410 — — Total deferred tax assets $ 10,988,788 $ 5,197,588 $ 85,455 Noncurrent deferred tax liabilities: Fixed assets — ( 653,819 — Inta ngibles ( 2,717,717 ) ( 1,808,960 ) — Deferred tax liabilities $ ( 2,717,717 ) $ ( 2,462,779 ) $ — Valuation allowance ( 8,271,071 ) ( 2,734,809 ) ( 85,455 ) Deferred taxes after valuation allowance $ — $ — $ — During the six months ended December 31, 2020 5.5 of which $ 2.7 2.8 Our deferred tax valuation allowances are primarily the result of uncertainties regarding the future realization of recorded tax benefits on tax losses. The measurement of deferred tax assets is reduced by a valuation allowance if based upon available evidence, it is more likely than not that the deferred tax assets will not be realized. We have evaluated the realizability of our deferred tax assets in each jurisdiction by assessing the adequacy of expected taxable income, including the reversal of existing temporary differences, historical and projected operating results, and the availability of prudent and feasible tax planning strategies. Based on this analysis, we have determined that the valuation allowances recorded as of December 31, 2020 June 30, 2020 We have deferred tax assets related to U.S. federal tax and state tax carryforwards for net operating losses, which will not expire in the amount of $ 24.5 2039 We have deferred tax assets related to foreign net operating loss carryforward, which begin to expire in 2028 9.8 We are not currently under examination for any of the major jurisdictions where we conduct business as of December 31, 2020 2020 12 f $ 50,000 one December 31, 2020 2020 |
Revisions of Financial Statemen
Revisions of Financial Statements for the six months ending December 31, 2020 and 2019 | 6 Months Ended |
Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Revisions of Financial Statements for the six months ending December 31, 2020 and 2019 | Note 16 During the course of preparing the annual report on Form 10-K for the year ended June 30, 2020, we determined that costs incurred during the application development phase of certain new software applications and enhancements were not properly capitalized, which resulted in the overstatement of operating expenses and net loss, and an understatement of amortization expense for each of the quarters during the year ended June 30, 2020. We assessed the materiality of these errors on prior periods’ financial statements and concluded that the errors were not material to any prior annual or interim periods, but the cumulative adjustments necessary to correct the errors would be material if we recorded the corrections the period in which the errors were identified. In accordance with GAAP, we are revising the prior periods’ financial statements when they are next issued. See Item. 4 Three Months Ended December 31, 2019 As reported Adjustment As revised Condensed Consolidated Statements Cost of revenue 1,638,840 ( 23,601 ) 1,615,239 Gross profit 1,667,363 23,601 1,690,964 Product development 1,261,509 ( 638,008 ) 623,501 Selling, general and administrative 4,796,404 86,768 4,883,172 Net loss ( 4,338,536 ) 574,841 ( 3,763,695 ) Net loss per share ( 0.40 ) — ( 0.34 ) Six Months Ended December 31, 2019 As reported Adjustment As revised Condensed Consolidated Statements of Operations Cost of revenue 3,036,201 ( 41,261 ) 2,994,940 Gross profit 3,462,892 41,261 3,504,153 Product development 2,392,389 ( 1,157,986 ) 1,234,403 Selling, general and administrative 8,380,219 104,667 8,484,886 Net loss ( 7,184,607 ) 1,094,580 ( 6,090,027 ) Net loss per share ( 0.66 ) — ( 0.56 ) Three Months Ended March 31, 2020 As reported Adjustment As revised Condensed Consolidated Statements of Operations Cost of revenue 1,420,909 ( 24,690 ) 1,396,219 Gross profit 1,649,637 24,690 1,674,327 Product development 1,632,353 ( 757,566 ) 874,787 Selling, general and administrative 5,500,837 177,405 5,678,242 Net loss ( 5,348,980 ) 604,851 ( 4,744,129 ) Net loss per share ( 0.43 ) — ( 0.38 ) |
Subsequent Events
Subsequent Events | 6 Months Ended |
Dec. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 17 On February 2, 2021, the Company and Holders of the outstanding Convertible Notes agreed, in connection with our installment notice for the February 1, 2021 installment amount, to increase the installment amount for February 1, 2021, in the aggregate, by $ 4,400,000 issued 1,113,969 shares of common stock of Akerna to the holders of Akerna’s convertible notes upon conversion of installment amounts due under the terms of the notes during the first quarter of 2021. On March 11, 2021, Akerna issued a pre ss release announcing a cannabis business management software system built on SAP Business One |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying financial statements and related notes reflect the historical results of MJF prior to the mergers completed in , or the Mergers, with MTech Acquisition Corp., or MTech, and other related entities, which resulted in the combined company and do not include the historical results of MTech prior to the completion of the mergers. The Consolidated Financial Statements are presented in accordance with accounting principles generally accepted in the United States, or GAAP, and our reporting currency is the United States Dollar. |
Principles of Consolidation | Principles of Consolidation Our accompanying consolidated financial statements include the accounts of Akerna, our wholly-owned subsidiaries, and those entities in which we otherwise have a controlling financial interest. All significant intercompany balances and transactions have been eliminated in consolidation. We evaluate our ownership interests, contractual rights, and other interests in entities to determine if the entities are variable interest entities or VIEs when we have a variable interest in those entities. Generally, a VIE is a legal entity in which the equity investors do not have the characteristics of a controlling financial interest or the equity investors lack sufficient equity at risk for the entity to finance its activities without additional subordinated financial support. These evaluations can be complex and involve judgment and the use of estimates and assumptions based on available historical information. If we determine that we hold a variable interest in a VIE and we are the primary beneficiary of the VIE, we must consolidate the VIE in our financial statements. In determining whether we are the primary beneficiary of a VIE, we consider qualitative and quantitative factors, including, but not limited to: which activities most significantly impact the VIE’s economic performance and which party controls such activities; the amount and characteristics of our investment; the obligation or likelihood for us or other investors to provide financial support; and the similarity with and significance to our business activities and the business activities of the other investors. Significant judgments related to these determinations include estimates about the current and future fair values and performance of these VIE’s operations and general market conditions. We determine whether we are the primary beneficiary of a VIE upon our initial involvement with the VIE and reassess our status on an ongoing basis. |
Use of Estimates | Use of Estimates The preparation of our consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts included in the financial statements and accompanying notes thereto. We base our estimates on assumptions that we believe to be reasonable under the circumstances, the results of which form a basis for making judgments about the carrying value of assets and liabilities that are not readily available from other sources. Actual results could differ from those estimates under different assumptions or conditions; however, we believe that our estimates are reasonable. |
Cash and Cash Equivalents | Cash and Cash Equivalents We consider liquid instruments purchased with an original maturity of three December 31, 2020 June 30, 2020 2019 |
Restricted Cash | Restricted Cash Restricted cash consists of funds that are contractually or legally restricted as to usage or withdrawal and is presented separately from cash and cash equivalents on our consolidated balance sheets. Our restricted cash serves as collateral for a letter of credit. |
Accounts Receivable, Net | Accounts Receivable, Net We maintain an allowance for doubtful accounts equal to the estimated uncollectible amounts based on our historical collection experience and review of the current status of trade accounts receivable. Receivables are written-off and charged against the recorded allowance when we have exhausted collection efforts without success. The allowance for doubtful accounts was $ 0.2 million as of December 31, 2020 June 30, 2020 2019 The allowance for doubtful accounts consists of the following activity: Six Months Ended December 31, Year Ended June 30, 2020 2020 2019 Allowance for doubtful accounts, beginning balance $ 208,422 $ 190,088 $ 39,571 Ad ditions: B ad debt expense 72,832 1,094,507 345,951 Deductions: Write-off uncollectable accounts ( 89,008 ) ( 1,076,173 ) ( 195,424 ) Allowance for doubtful accounts, ending balance $ 192,246 $ 208,422 $ 190,098 |
Concentrations of Credit Risk | Concentrations of Credit Risk We grant credit in the normal course of business to customers in the United States. We periodically perform credit analysis and monitor the financial condition of our customers to reduce credit risk. During the six months ended December 31, 2020 June 30, 2020 2019 one government client accounted for 14 25 % and 30 December 31, 2020 June 30, 2020 June 30, 2019 two government clients accounted f or a total of 36 54 58 of net accounts receivable, respectively. |
Equity Method Investments | Equity Method Investments We make strategic investm |
Intangible Assets Acquired through Business Combinations | Intangible Assets Acquired through Business Combinations Intangible assets are amortized over their estimated useful lives. We evaluate the estimated remaining useful life of our intangible assets when events or changes in circumstances indicate an adjustment to the remaining amortization may be needed. We similarly evaluate the recoverability of these assets upon events or changes in circumstances indicate a potential impairment. Recoverability of these assets is measured by comparing the carrying amount of each asset to the future undiscounted cash flows the asset is expected to generate. If the undiscounted cash flows used in the test for recoverability are less than the carrying amount of these assets, the carrying amount of such assets is reduced to fair value. We recorded an impairment of $ 2.7 June 30, 2020 2019 6 |
Goodwill Impairment Assessment | Goodwill Impairment Assessment Goodwill represents the excess purchase consideration of an acquired business over the fair value of the net tangible and identifiable intangible assets. Goodwill is evaluated for impairment annually on October 31, and whenever events or changes in circumstances indicate the carrying value of goodwill may not be recoverable. Triggering events that may indicate impairment include, but are not limited to, a significant adverse change in customer demand or business climate or a significant decrease in expected cash flows. An impairment loss is recognized to the extent that the carrying amount exceeds the reporting unit’s fair value, not to exceed the carrying amount of goodwill. The Company has the option to first assess qualitative factors to determine whether events or circumstances indicate that it is more likely than not that the fair value of a reporting unit is less than its carrying amount and determine whether further action is needed. If, after assessing the totality of events or circumstances, the Company determines it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then performing the quantitative impairment test is unnecessary. We recorded an impairment to goodwill of $4.2 million during the six months ended December 31, 2020 June 30, 2020 2019 6 |
Software Development Costs | Software Development Costs Costs incurred during the application development stage of a newly developed application and costs we incur to enhance our existing platforms that meet certain criteria are subject to capitalization and subsequent amortization. Capitalized software development costs were approximately $ 2.1 December 31, 2020 3.1 June 30, 2020 ch as payroll and benefits, vendor 2 5 |
Property and Equipment | Property and Equipment Property and equipment are recorded at cost. Expenditures for major additions and improvements are capitalized. Depreciation and amortization is provided over the estimated useful lives of the related assets using the straight-line method. The estimated useful lives for significant property and equipment categories are generally as follows: Furniture and computer equipment 3 7 Leasehold improvements Lesser of remaining lease term or useful life Repairs and maintenance costs are expensed as incurred. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Under this guidance, we are required to classify certain assets and liabilities based on the fair value hierarchy, which groups fair value-measured assets and liabilities based upon the following levels of inputs: ● Level 1 ● Level 2 ● Level 3 The fair value of financial instruments is the amount at which the instrument could be exchanged in a current transaction between willing parties. The carrying values of financial instruments such as accounts receivable, accounts payable and accrued liabilities approximate fair value based on their short maturities. Please refer to Note 12 - Fair Value Measurements for additional |
Fair Value Option | Fair Value Option The fair value option provides an election that allows a company to irrevocably elect to record certain financial assets and liabilities at fair value on an instrument-by-instrument basis at initial recognition. We have elected to apply the fair value option to certain convertible notes due to the complexity of the various conversion and settlement options available to both the Note Holders and Akerna. The convertible notes accounted for under the fair value option election are each a debt host financial instrument containing embedded features that would otherwise be required to be bifurcated from the debt-host and recognized as separate derivative liabilities subject to initial and subsequent periodic estimated fair value measurements in accordance with GAAP. Notwithstanding, when the fair value option election is applied to financial liabilities, bifurcation of an embedded derivative is no required, and the financial liability is initially measured at its issue-date estimated fair value and then subsequently remeasured at estimated fair value on a recurring basis as of each reporting period date. The portion of the change in fair value attributed to a change in the instrument-specific credit risk is recognized as a component of other comprehensive income and the remaining amount of the fair value adjustment is recognized as other income (expense) in our consolidated statement of operations. The estimated fair value adjustment is presented in a respective single line item within other income (expense) in the accompanying consolidated statement of operations because the change in fair value of the convertible notes was not attributable to instrument-specific credit risk. |
Revenue Recognition | Revenue Recognition See Note 3 for further discussion of our revenue recognition policies. |
Cost of Goods and Service [Policy Text Block] | Cost of Revenue Cost of revenue consists primarily of costs related to providing subscription and other services to our customers, including employee compensation and related expenses for data center operations, customer support and professional services personnel, payments to outside technology service providers, security services, and other tools. |
Product Development | Product Development Product development expenses consist primarily of employee-related costs for the design and development of the Company's platform, contractor costs to supplement staff levels, third-party web services, consulting services, and allocated overhead. Product development expenses, other than software development costs qualifying for capitalization, are expensed as incurred. |
Sales and Marketing Expenses | Sales and Marketing Expenses Sales and marketing expenses con |
General and Administrative Expenses | General and Administrative General and administrative expenses consist primarily of personnel and related costs for our executive, finance, legal, human resources, and administrative personnel, including salaries, b nefits, bonuses, and stock-based compensation; legal, accounting, and other professional service fees; other corporate expenses; information technology costs; and facility costs. |
Legal and Other Contingencies | Legal and Other Contingencies From time to time, the Company may be a party to litigation and subject to claims incident to the ordinary course of business, including intellectual property claims, labor and employment claims, breach of contract claims and other asserted and unasserted claims. The Company investigates these claims as they arise and accrues estimates for resolution of legal and other contingencies when losses are probable and estimable. |
Stock-Based Compensation | Stock-Based Compensation We measured stock-based compensation based on the fair value of the share-based awards on the date of grant and recognize the related costs on a straight-line basis over the requisite service period, which is generally the vesting period. |
Reclassifications | Reclassifications Certain prior year financial statement amounts have been reclassified for consistency with the current year presentation. |
Income Taxes | Income Taxes Income taxes are accounted for using the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax basis of other assets and liabilities. We provide for income taxes at the current and future enacted tax rates and laws applicable in each taxing jurisdiction. We use a two We recognize deferred tax assets to the extent that its assets are more likely than not to be realized. In making such a determination, we consider all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies, and results of recent operations. If we determine that we would be able to realize our deferred tax assets in the future in excess of its net recorded amount, we will make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes. |
Segments | Segments Our chief operating decision maker reviews financial information presented on a consolidated basis for purposes of allocating resources and evaluating financial performance and information for different revenue streams is not evaluated separately. As such, the Company has one In the following table, we disclosure our long-lived assets by geographical location (in thousands): 2020 2020 2019 Long-lived assets: United States $ 9,994 $ 10,254 $ - Canada 5,074 - - Total $ 15,068 $ 10,254 $ - |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements The Financial Accounting Standards Board, or the FASB, has issued guidance to revise accounting for revenue from contracts with customers, which supersedes the revenue recognition requirements and industry-specific guidance currently in effect for us. The new revenue standard requires an entity to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration the entity expects to be entitled to in exchange for those goods or services. The new revenue standard allows for either full retrospective or modified retrospective adoption. We adopted the new standard using the modified retrospective approach. Refer to Note 3 The FASB has issued guidance related to the accounting for share-based compensation to , which eliminates the separate accounting model for The FASB has issued new guidance related to the accounting for leases. The new standard establishes a right-of-use model that requires a lessee to record a right-of-use asset and a lease liability on the balance sheet for all leases with terms longer than 12 2022 The FASB has issued guidance to introduce a new model for recognizing credit losses on financial instruments based on estimated current expected credit losses, or CECL. Under the new standard, an entity is required to estimate CECL on trade receivables at inception, based on historical information, current conditions, and reasonable and supportable forecasts. The new guidance is effective for us in our fiscal year beginning in 2023 The FASB has issued guidance regarding when internal-use software development costs should be capitalized or charged to expense. Depending upon the nature of the costs and the project stage in which they are incurred. Capitalized development costs are subject to amortization and impairment guidance consistent with existing internal-use software development cost guidance. The guidance is applicable for us in our fiscal year beginning in 2023 The FASB has issued guidance clarifying the interactions between various standards governing investments in equity securities. The new guidance addresses accounting for the transition into and out of the equity method and measurement of certain purchased options and forward contracts to acquire investments. The standard is effective for us for annual and interim periods in our fiscal year beginning in 2022 |
Foreign Currency Translation | Foreign Currency Translation The functional currency of the Company's non-U.S. operations is the local currency. Monetary assets and liabilities denominated in foreign currencies are translated into U.S. dollars at exchange rates prevailing at the balance sheet dates. Non-monetary assets and liabilities are translated at the historical rates in effect when the assets were acquired or obligations incurred. Revenue and expenses are translated into U.S. dollars using the average rates of exchange prevailing during the period. Translation gains or losses are included as a component of accumulated other comprehensive loss in stockholders' equity. Gains and losses resulting from foreign currency transactions are recognized as other income (expense). |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Schedule of allowance for doubtful accounts | Six Months Ended December 31, Year Ended June 30, 2020 2020 2019 Allowance for doubtful accounts, beginning balance $ 208,422 $ 190,088 $ 39,571 Ad ditions: B ad debt expense 72,832 1,094,507 345,951 Deductions: Write-off uncollectable accounts ( 89,008 ) ( 1,076,173 ) ( 195,424 ) Allowance for doubtful accounts, ending balance $ 192,246 $ 208,422 $ 190,098 |
Schedule of property and equipment estimated useful lives | Furniture and computer equipment 3 7 Leasehold improvements Lesser of remaining lease term or useful life |
Schedule of long-lived assets by geographical location | 2020 2020 2019 Long-lived assets: United States $ 9,994 $ 10,254 $ - Canada 5,074 - - Total $ 15,068 $ 10,254 $ - |
Revenue (Tables)
Revenue (Tables) | 6 Months Ended |
Dec. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Summarizes revenue disaggregation | Six Months Ended December 31, 2020 Year Ended June 30, 2020 ( 1 Year Ended June 30, 2019 ( 1 Government $ 1,939 $ 4,906 $ 4,155 Non-government 5,886 7,667 6,668 $ 7,825 $ 12,573 $ 10,823 ( 1 606 historical accounting guidance in effect for those periods. |
Summarizes adjusted for the adoption of ASC 606 | Six Months Ended December 31, 2020 Year Ended June 30, 2020 ( 1 Year Ended June 30, 2019 ( 1 United States $ 5,212 $ 12,573 $ 10,823 Canada 2,613 — — $ 7,825 $ 12,573 $ 10,823 |
Summarizes deferred contract cost activity | As of July 1, 2020 (adjusted) Additions Amortized costs ( 1 As of December 31, 2020 Deferred contract costs $ 186 271 ( 229 $ 228 ( 1 |
Summarizes deferred revenue activity | As of July 1, 2020 (adjusted) Net additions Revenue recognized As of December 31, 2020 Deferred revenue $ 369 8,300 ( 7,825 ) $ 844 |
Significant Transactions (Table
Significant Transactions (Tables) | 6 Months Ended |
Dec. 31, 2020 | |
Business Acquisition [Line Items] | |
Schedule of pro forma financial information | Six Months Ended Year Ended June 30 Year Ended June 30 2020 2020 2019 Revenue $ 7,825 $ 18,314 $ 19,038 Net loss $ ( 16,095 ) $ ( 21,412 ) $ ( 27,242 ) |
Trellis Solutions, Inc. [Member] | |
Business Acquisition [Line Items] | |
Schedule of estimated acquisition date fair value of consideration | Common shares issued $ 2,531 Cont ingent consid 998 Total estimated fair value of consideration $ 3,529 |
Schedule of preliminary estimated fair values of assets acquired and liabilities | Cash $ 21 Accounts receivable, net 91 Other assets 6 Acquired technology 210 Acquired trade name 80 Customer relationships 220 Goodwill 3,216 Accounts payable and accrued expenses ( 284 ) Deferred revenue ( 31 ) Net assets acquired $ 3,529 |
Solo Sciences, Inc. [Member] | |
Business Acquisition [Line Items] | |
Schedule of estimated acquisition date fair value of consideration | Common shares issued $ $ 17,550 Contingent considerat 389 Total estimated fair value of consideration $ 17,939 |
Schedule of preliminary estimated fair values of assets acquired and liabilities | Cash $ 101 Prepaid expenses and other assets 22 Furniture, fixtures, and equipment 2 Acquired technology 7,160 Acquired trade name 340 Goodwill 17,025 Accounts payable and accrued liabilities ( 1,158 ) Fair value of noncontrolling interests ( 5,553 ) Net assets acquired $ 17,939 |
Ample Organics [Member] | |
Business Acquisition [Line Items] | |
Schedule of estimated acquisition date fair value of consideration | Preliminary Exchangeable shares issued $ 25,203 Cash 5,724 Contingent consideration 604 Total preliminary fair value of consideration transferred 31,531 |
Schedule of preliminary estimated fair values of assets acquired and liabilities | Preliminary Cash $ 445 Accounts receivable 917 Prepaid expenses and other current assets 595 Acquired technology 850 Customer relationships 2660 Acquired trade name 285 Goodwill 25,806 Furniture, fixtures and equipment 1,327 Accounts payable and accrued expenses ( 805 ) Deferred revenue ( 549 ) Net assets acquired $ 31,531 |
Balance Sheet Disclosures (Tabl
Balance Sheet Disclosures (Tables) | 6 Months Ended |
Dec. 31, 2020 | |
Balance Sheet Disclosures [Abstract] | |
Schedule of prepaid expenses and other current assets | As of December 31 As of June 30 2020 2020 2019 Software and technology $ 480,651 $ 571,695 $ 237,930 Professional services, dues and subscriptions 826,195 473,731 169,804 Insurance 243,222 105,814 159,940 Deferred contract costs 227,718 — — Unbilled re ceivab 612,446 — — Other 68,495 64,101 10,000 Total prepaid expenses and other current assets $ 2,458,727 $ 1,215,341 $ 577,674 |
Schedule of accounts payable and accrued liabilities | As of December 31 As of June 30, 2020 2020 2019 Accounts payable $ 513,610 $ 1,443,895 $ 1,317,566 Professional fees 333,709 2,273,659 49,205 Sales taxes 216,367 59,825 36,358 Compensation 311,379 260,042 354,724 Contractors 1,281,857 782,366 19,557 Other 531,654 42,141 40,706 Total accounts payable and accrued liabilities $ 3,188,576 $ 4,861,928 $ 1,818,116 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets, Net (Tables) | 6 Months Ended |
Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of changes in the carrying amount of goodwill | Balance as of June 30, 2019 $ — Additions due to acquisitions 20,254,309 B alance as $ 20,254,309 Adjustments to Trellis' goodwill ( 14,300 Additions due to acquisition of Ample 25,806,518 Goodwill impairment related to Ample ( 4,172,000 B alance December 31, 2020 $ 41,874,527 |
Schedule of intangible assets | Weighted average remaining amortization period (in years) Gross carrying amount Accumulated amortization Net carrying amount Acquired developed technology 4.42 $ 7,370,000 $ ( 679,696 ) $ 6,690,304 Acquired trade names 7.40 420,000 ( 23,248 ) 396,752 Customer relationships 1.75 220,000 ( 24,475 ) 195,525 Other intangible assets, not yet placed into service N/A 211,394 — 211,394 Total Intangible assets $ 8,221,394 $ ( 727,419 ) $ 7,493,975 Capitalized software - In-service 1.86 2,852,044 ( 560,528 ) 2,291,516 Capitalized software - Work in Progress N/A 337,788 — 337,788 Total Capitalized Software 3,189,832 ( 560,528 ) 2,629,304 Total finite-lived intangible assets $ 11,411,226 $ ( 1,287,947 ) $ 10,123,279 Weighted average remaining amortization period (in years) Gross Accumulated amortization Impairment Net carrying amount Acquired developed technology 3.77 $ 8,220,000 $ ( 1,434,155 ) ( 2,591,920 ) $ 4,193,925 Acquired trade names 5.12 705,000 ( 97,676 ) ( 123,080 ) 484,244 Customer relationships 13.04 2,880,000 ( 169,374 ) — 2,710,626 Other intangible assets, not yet placed into service N/A — — — — Total Intangible assets $ 11,805,000 $ ( 1,701,205 ) ( 2,715,000 ) $ 7,388,795 Capitalized software - In-service 1.62 4,593,512 ( 1,401,953 ) — 3,191,559 Capitalized software - Work in Progress N/A 734,180 — — 734,180 Total Capitalized Software 5,327,692 ( 1,401,953 ) — 3,925,739 Total finite-lived intangible assets $ 17,132,692 $ ( 3,103,158 ) ( 2,715,000 ) $ 11,314,534 |
Schedule of capitalized software and purchased intangible assets | Acquired Intangible Assets Capitalized Software- In-service 2021 $ 1,656,991 $ 2,040,462 2022 1,501,654 908,094 2023 1,239,864 105,498 2024 1,036,991 94,463 2025 243,436 43,042 Thereafter 1,709,859 — Tota $ 7,388,795 $ 3,191,559 |
Fixed assets, net (Tables)
Fixed assets, net (Tables) | 6 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Schedule of fixed assets, net | As of As of June 30, 2020 2020 Furniture and computer equipment $ 131,300 $ 73,048 Leasehold improvements 1,175,556 85,998 1,306,856 159,046 Less: accumulated depreciation ( 113,423 ( 27,951 Fixed assets, net $ 1,193,433 $ 131,095 |
Long Term Debt (Tables)
Long Term Debt (Tables) | 6 Months Ended |
Dec. 31, 2020 | |
Line of Credit Facility [Abstract] | |
Schedule of long-term debt | Convertible Notes (at fair value) $ 13,398,000 PPP loan 2,204,600 Subtotal 15,602,600 Less: current maturities ( 11,707,363 ) Total long-term debt, less current portion $ 3,895,237 |
Schedule of maturities of outstanding long-term debt obligations in subsequent years | Year ending December 31, 2021 $ 11,707,363 2022 5,669,965 Aggregate maturities 17,377,328 Original issue discount on Convertible Notes ( 2,040,000 ) Unrealized change i n fair value of Convertible Note 265,272 Long term debt outstanding as of December 31, 2020 $ 15,602,600 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 6 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
Schedule of stock warrants | Shares Issuable Under Warrants Weighted-average Exercise Price Weighted Average Remaining Life Aggregate Intrinsic Value Outstanding at June 30, 2019 6,183,115 $ 11.50 4.97 $ 2,473,000 Issued — — — — Exercised ( 369,311 ) — — — Expired/canceled — — — — Outstanding at June 30, 2020 5,813,804 $ 11.50 3.97 $ — Issued — — — — Exercised — — — — Expired/canceled — — — — Outstanding at December 31, 2020 5,813,804 $ 11.50 3.37 $ — |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 6 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
Schedule of stock warrants | Restricted Shares Restricted Stock Units Total Weighted Average Grant Date Fair Value Unvested as of June 30, 2019 215,063 — 215,063 $ 11.99 Granted — 571,229 571,229 7.24 Vested ( 88,659 ) ( 26,965 ) ( 115,624 ) 7.25 Forfeited ( 54,091 ) ( 78,470 ) ( 132,561 ) 10.83 Unvested as of June 30, 2020 72,313 465,794 538,107 $ 6.56 Granted — 429,974 429,974 4.88 Vested ( 8,024 ) ( 157,350 ) ( 165,374 ) 5.08 Forfeited — ( 43,906 ) ( 43,906 ) 6.83 Unvested as of December 31, 2020 64,289 694,512 758,801 6.77 |
Loss Per Share (Tables)
Loss Per Share (Tables) | 6 Months Ended |
Dec. 31, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of diluted earnings per share | December 31, 2020 June 30, 2020 June 30, 2019 Shares issuable upon exchange of Exchangeable Shares 2,667,349 — — Warrants 5,813,804 5,813,804 6,183,115 Restricted Stock Units 694,512 325,121 — Restricted Stock Awards 64,289 75,654 215,063 Shares of common stock issuable in upon conversion of Convertible Notes 1,319,368 1,936,845 — Total 10,559,322 8,151,424 6,398,178 |
Fair Value (Tables)
Fair Value (Tables) | 6 Months Ended |
Dec. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Schedule of reconciliation of fair values | Beginning fair value balance on issue date - June 9, 2020 $ 14,960,000 Change in fair value reported in the statements of operations ( 766,000 ) Change in fair value reported in other comprehensive income ( 63,000 ) Ending fair value balance - June 30, 2020 $ 14,131,000 Payments on Convertible Notes ( 1,827,273 ) Change in fair value reported in the statements of operations 961,273 Change in fair value reported in other comprehensive income 133,000 Ending fair value balance - December 31, 2020 $ 13,398,000 |
Schedule of fair value by using key inputs | Fair Value Assumptions - Convertible Notes December 31, 2020 June 30, 2020 June 30, 2019 Face value principal payable $ 15,172,272 $ 17,000,000 $ 17,000,000 Original conversion price $ 11.5 $ 11.5 $ 11.5 Value of Common Stock $ 3.24 $ 8.8 $ 10.28 Expected term (years) 2.3 2.9 3 Volatility 77 % 45 % 45 % Market yield (range) 27.1 27.2 % 23.9 % 23.3 23.4 % Risk free rate 0.1 % 0.2 % 0.2 % |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 6 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of future minimum lease payments | 2021 $ 416 2022 415 2023 444 2024 447 2025 490 2026 1,031 Total $ 3,243 |
Income Taxes (Tables)
Income Taxes (Tables) | 6 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of expense or (benefit) for income taxes | December 31, June 30, 2020 2019 2020 2019 Deferred income taxes U.S. federal $ — $ — $ — $ — U.S. state — — — — Total deferred income tax benefit $ — $ — $ — $ — December 31, June 30, 2020 2020 2019 Income tax expense Current income taxes U.S. federal $ — $ 30,985 $ — U.S. state 200 — — Total current income taxes $ 200 $ 30,985 $ — |
Schedule of statutory federal income tax rate to actual rates based on income or loss before income taxes | December 31, 2020 June 30, 2020 2020 2019 Noncurrent deferred tax assets: Employee compensation $ 679,106 $ 378,003 $ — Debt issuance costs 343,612 323,183 — Revenue recognition — 156,022 22,226 Settlement accrual 182,896 — — Fixed assets 831,196 — — Federal and state net operating loss 6,337,897 4,082,297 63,229 Foreign net operating loss 2,586,671 258,083 — Other 27,410 — — Total deferred tax assets $ 10,988,788 $ 5,197,588 $ 85,455 Noncurrent deferred tax liabilities: Fixed assets — ( 653,819 — Inta ngibles ( 2,717,717 ) ( 1,808,960 ) — Deferred tax liabilities $ ( 2,717,717 ) $ ( 2,462,779 ) $ — Valuation allowance ( 8,271,071 ) ( 2,734,809 ) ( 85,455 ) Deferred taxes after valuation allowance $ — $ — $ — December 31, June 30, 2020 2020 2019 Income tax expense attributable to: Federal $ ( 3,560,998 ) $ ( 3,255,706 ) $ ( 2,509,246 ) State, net of federal benefit ( 553,871 ) ( 862,690 ) ( 13,452 ) Foreign tax rate differential 29,617 ( 2,645 ) — Permanent differences 1,263,151 312,525 — Rate change 60,220 — — Restricted stock awards — — 816,505 Changes in valuation allowance 2,762,081 3,884,440 85,455 Provision to return adjustment — ( 45,134 ) — Losses from flow-through entity not subject to tax — — 1,640,066 Other adjustments — 195 ( 19,328 ) Effective income tax expense $ 200 $ 30,985 $ — |
Revisions of Financial Statem_2
Revisions of Financial Statements for the six months ending December 31, 2020 and 2019 (Tables) | 6 Months Ended |
Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of reclassifications | Three Months Ended December 31, 2019 As reported Adjustment As revised Condensed Consolidated Statements Cost of revenue 1,638,840 ( 23,601 ) 1,615,239 Gross profit 1,667,363 23,601 1,690,964 Product development 1,261,509 ( 638,008 ) 623,501 Selling, general and administrative 4,796,404 86,768 4,883,172 Net loss ( 4,338,536 ) 574,841 ( 3,763,695 ) Net loss per share ( 0.40 ) — ( 0.34 ) Six Months Ended December 31, 2019 As reported Adjustment As revised Condensed Consolidated Statements of Operations Cost of revenue 3,036,201 ( 41,261 ) 2,994,940 Gross profit 3,462,892 41,261 3,504,153 Product development 2,392,389 ( 1,157,986 ) 1,234,403 Selling, general and administrative 8,380,219 104,667 8,484,886 Net loss ( 7,184,607 ) 1,094,580 ( 6,090,027 ) Net loss per share ( 0.66 ) — ( 0.56 ) Three Months Ended March 31, 2020 As reported Adjustment As revised Condensed Consolidated Statements of Operations Cost of revenue 1,420,909 ( 24,690 ) 1,396,219 Gross profit 1,649,637 24,690 1,674,327 Product development 1,632,353 ( 757,566 ) 874,787 Selling, general and administrative 5,500,837 177,405 5,678,242 Net loss ( 5,348,980 ) 604,851 ( 4,744,129 ) Net loss per share ( 0.43 ) — ( 0.38 ) |
Description of Business, Liqu_2
Description of Business, Liquidity, and Capital Resources (Details) - USD ($) | Feb. 02, 2021 | Jan. 04, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Mar. 31, 2021 |
Loss from operations | $ (15,739,677) | $ (6,215,136) | $ (17,271,851) | $ (12,512,346) | |||
Cash in operations | (8,705,738) | $ (14,347,652) | $ (9,048,595) | ||||
Non recurring expenses | $ 1.6 | ||||||
Cost reduction initiatives, description | costs and identifying cost savings that we expect to result in annual savings of an additional $3.0 million to $4.0 million | ||||||
Subsequent Event [Member] | |||||||
secured convertible notes | $ 7,500,000 | ||||||
Installment amount | $ 4,400,000 | $ 2,062,500 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - USD ($) | 6 Months Ended | 12 Months Ended | |
Dec. 31, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | |
Accounting Policies [Abstract] | |||
Allowance for doubtful accounts, beginning balance | $ 208,422 | $ 190,098 | $ 39,571 |
Additions: | |||
Bad debt expense | 72,832 | 1,094,507 | 345,941 |
Deductions: | |||
Write-off uncollectable accounts | (89,008) | (1,076,173) | (195,424) |
Allowance for doubtful accounts, ending balance | $ 192,246 | $ 208,422 | $ 190,098 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details Textual) | 6 Months Ended | 12 Months Ended | |
Dec. 31, 2020USD ($)Customers | Jun. 30, 2020USD ($)Customers | Jun. 30, 2019USD ($)Customers | |
Allowance for doubtful accounts | $ 200,000 | $ 200,000 | $ 200,000 |
Software development costs | 2,100,000 | $ 3,100,000 | |
performance obligations | 1.2 | ||
Revenue recognized | (7,825,000) | ||
Impairment expense | $ 2,700,000 | ||
Maximum [Member] | |||
Expected useful life | 5 years | ||
Minimum [Member] | |||
Expected useful life | 2 years | ||
Total Revenues [Member] | |||
Number of customer | Customers | 1 | 1 | 1 |
Total Revenues [Member] | Customer one [Member] | |||
Concentration risk percentage | 14.00% | 25.00% | 30.00% |
Net Accounts Receivable [Member] | |||
Number of customer | Customers | 2 | 2 | 2 |
Net Accounts Receivable [Member] | Customer two [Member] | |||
Concentration risk percentage | 36.00% | 54.00% | 58.00% |
Revenue (Details)
Revenue (Details) - USD ($) | 6 Months Ended | 12 Months Ended | |||
Dec. 31, 2020 | Jun. 30, 2020 | [1] | Jun. 30, 2019 | [1] | |
Disaggregation of Revenue [Line Items] | |||||
Revenue disaggregation | $ 7,825 | $ 12,573 | $ 10,823 | ||
Government [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue disaggregation | 1,939 | 4,906 | 4,155 | ||
Non-Government [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue disaggregation | $ 5,886 | $ 7,667 | $ 6,668 | ||
[1] | As noted above, prior periods have not been adjusted for the adoption of ASC 606 and are presented in accordance with historical accounting guidance in effect for those periods. |
Revenue (Details 1)
Revenue (Details 1) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | |||
Dec. 31, 2020 | Jun. 30, 2020 | [1] | Jun. 30, 2019 | [1] | |
Disaggregation of Revenue [Line Items] | |||||
Adjusted for adoption | $ 7,825 | $ 12,573 | $ 10,823 | ||
United States | |||||
Disaggregation of Revenue [Line Items] | |||||
Adjusted for adoption | 5,212 | 12,573 | 10,823 | ||
Canada | |||||
Disaggregation of Revenue [Line Items] | |||||
Adjusted for adoption | $ 2,613 | ||||
[1] | As noted above, prior periods have not been adjusted for the adoption of ASC 606 and are presented in accordance with historical accounting guidance in effect for those periods. |
Revenue (Details 2)
Revenue (Details 2) $ in Thousands | 6 Months Ended |
Dec. 31, 2020USD ($) | |
Revenue from Contract with Customer [Abstract] | |
Deferred revenue Beginning Balance | $ 369 |
Net additions | 8,300 |
Revenue recognized | (7,825) |
Deferred revenue Ending Balance | $ 844 |
Revenue (Details 3)
Revenue (Details 3) $ in Thousands | 6 Months Ended |
Dec. 31, 2020USD ($) | |
Revenue from Contract with Customer [Abstract] | |
Deferred contract costs Beginning Balance | $ 186 |
Additions | 271 |
Amortized costs | (229) |
Deferred contract costs Ending Balance | $ 228 |
Revenue (Details Textual)
Revenue (Details Textual) - USD ($) | 6 Months Ended | |||
Dec. 31, 2020 | Jul. 03, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | ||||
Accumulated deficit | $ (57,872,599) | $ (41,101,091) | $ (25,566,746) | |
Deferral of contract costs | 200,000 | |||
Revenue recognized | 7,800,000 | |||
Deferred revenue | 843,900 | $ 0.4 | $ 368,685 | $ 624,387 |
Deferred Revenue, Recognized | $ 800,000 |
Significant Transactions (Detai
Significant Transactions (Details) - USD ($) | Apr. 08, 2020 | Jan. 15, 2020 | Dec. 31, 2020 | Jun. 30, 2020 |
Business Acquisition [Line Items] | ||||
Total estimated fair value of consideration | ||||
Trellis Solutions, Inc [Member] | ||||
Business Acquisition [Line Items] | ||||
Common shares issued | $ 2,531 | |||
Contingent consideration | 998 | |||
Total estimated fair value of consideration | $ 3,529 | |||
Solo Sciences, Inc. [Member] | ||||
Business Acquisition [Line Items] | ||||
Common shares issued | $ 17,550 | |||
Total estimated fair value of consideration | $ 17,939 | $ 0 |
Significant Transactions (Det_2
Significant Transactions (Details 1) - USD ($) | Dec. 31, 2020 | Jun. 30, 2020 | Jun. 30, 2019 |
Business Acquisition [Line Items] | |||
Cash | $ 445,269 | ||
Accounts receivable, net | 917,205 | 77,505 | |
Deferred revenue | $ (549,311) | (31,220) | |
Trellis Solutions, Inc [Member] | |||
Business Acquisition [Line Items] | |||
Cash | 21 | ||
Accounts receivable, net | 91 | ||
Other assets | 6 | ||
Acquired technology | 210 | ||
Acquired trade name | 80 | ||
Customer relationships | 220 | ||
Goodwill | 3,216 | ||
Accounts payable and accrued expenses | (284) | ||
Deferred revenue | (31) | ||
Net assets acquired | $ 3,529 |
Significant Transactions (Det_3
Significant Transactions (Details 2) - USD ($) | Jan. 15, 2020 | Dec. 31, 2020 | Jun. 30, 2020 |
Business Acquisition [Line Items] | |||
Total estimated fair value of consideration | |||
Solo Sciences, Inc. [Member] | |||
Business Acquisition [Line Items] | |||
Common shares issued | $ 17,550 | ||
Contingent consideration | 389 | ||
Total estimated fair value of consideration | $ 17,939 | $ 0 |
Significant Transactions (Det_4
Significant Transactions (Details 3) - USD ($) | Dec. 31, 2020 | Jun. 30, 2020 | Jun. 30, 2019 |
Business Acquisition [Line Items] | |||
Cash | $ 445,269 | ||
Prepaid expenses and other assets | $ 596,233 | 27,860 | $ 35,292 |
Solo Sciences, Inc. [Member] | |||
Business Acquisition [Line Items] | |||
Cash | 101 | ||
Prepaid expenses and other assets | 22 | ||
Furniture, fixtures, and equipment | 2 | ||
Acquired technology | 7,160 | ||
Acquired trade name | 340 | ||
Goodwill | 17,025 | ||
Accounts payable and accrued expenses | (1,158) | ||
Fair value of noncontrolling interests | (5,553) | ||
Net assets acquired | $ 17,939 |
Significant Transactions (Det_5
Significant Transactions (Details 4) - USD ($) | Jul. 07, 2020 | Dec. 31, 2020 | Jun. 30, 2020 |
Business Acquisition [Line Items] | |||
Total estimated fair value of consideration | |||
Ample Organics [Member] | |||
Business Acquisition [Line Items] | |||
Common shares issued | $ 25,203 | ||
Cash | 5,724 | ||
Contingent consideration | 604 | ||
Total estimated fair value of consideration | $ 31,531 | $ 0 |
Significant Transactions (Det_6
Significant Transactions (Details 5) - USD ($) | Dec. 31, 2020 | Jul. 07, 2020 | Jun. 30, 2020 | Jun. 30, 2019 |
Business Acquisition [Line Items] | ||||
Cash | $ 445,269 | |||
Accounts receivable, net | 917,205 | 77,505 | ||
Prepaid expenses and other assets | 596,233 | 27,860 | 35,292 | |
Deferred revenue | $ (549,311) | $ (31,220) | ||
Ample Organics [Member] | ||||
Business Acquisition [Line Items] | ||||
Cash | $ 445 | |||
Accounts receivable, net | 917 | |||
Prepaid expenses and other assets | 595 | |||
Acquired technology | 850 | |||
Customer relationships | 2,660 | |||
Acquired trade name | 285 | |||
Goodwill | 25,806 | |||
Furniture, fixtures, and equipment | 1,327 | |||
Accounts payable and accrued expenses | (805) | |||
Deferred revenue | (549) | |||
Net assets acquired | $ 31,531 |
Significant Transactions (Det_7
Significant Transactions (Details 6) - USD ($) | 6 Months Ended | 12 Months Ended | |
Dec. 31, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | |
Significant Transactions [Abstract] | |||
Revenues | $ 7,825 | $ 18,314 | $ 19,038 |
Net loss | $ (16,095) | $ (21,412) | $ (27,242) |
Significant Transactions (Det_8
Significant Transactions (Details Textual) - USD ($) | Jul. 07, 2020 | Jan. 30, 2020 | Jan. 15, 2020 | Jun. 30, 2020 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Sep. 01, 2020 | Jul. 31, 2020 | Apr. 08, 2020 |
Business Acquisition [Line Items] | ||||||||||||
Common stock, shares issued | 1,950,000 | 13,258,707 | 13,258,707 | 19,901,248 | 13,258,707 | 10,589,746 | 800,000 | |||||
Convertible into shares of common stock per share | $ 9 | |||||||||||
Percentage of exchange rate | 55.00% | 55.00% | 55.00% | |||||||||
Description of contingent consideration | (i) $0.01 per solo*TAG™ and solo*CODE™ sold or (ii) 7% of net revenue. The fees were to be paid annually until the earlier of: (1) our shares trading above $12 per share for any consecutive 20 trading days in a 30-day period; (b) upon our no longer owning a majority stake in Solo; or (c) upon expiration of the patents related to solo*TAG™ and solo*CODE™, which is December 1, 2029. | |||||||||||
Amortization expense of intangible assets | $ 1,800,000 | $ 1,300,000 | ||||||||||
Revenues | 7,824,784 | $ 6,499,093 | 12,573,276 | $ 10,823,117 | ||||||||
Net loss | $ (16,957,334) | $ (6,090,027) | $ (15,534,345) | $ (12,403,215) | ||||||||
Preferred stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||||||
Preferred stock, liquidation preference per share | $ 1 | |||||||||||
Exchangeable shares | 627,225 | |||||||||||
Exchangeable shares issued | 2,667,349 | 4,798,271 | ||||||||||
Assets and liability acquired | $ 14,300 | |||||||||||
General and administrative expenses | $ 1.8 | 1.1 | ||||||||||
Trellis Solutions, Inc [Member] | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Transaction costs | $ 100,000 | |||||||||||
Common stock, shares issued | 349,650 | |||||||||||
Convertible into shares of common stock per share | $ 7.24 | |||||||||||
Percentage of exchange rate | 100.00% | |||||||||||
Amount of contingent consideration liability | $ 1 | |||||||||||
Revenues | $ 216,000 | |||||||||||
Net loss | $ 17,000 | |||||||||||
Solo Sciences, Inc. [Member] | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Transaction costs | $ 300,000 | |||||||||||
Percentage of exchange rate | 80.40% | 40.00% | 40.00% | 40.00% | ||||||||
Estimated of fair value contingent consideration | $ 17,900,000 | |||||||||||
Revenues | $ 23,000 | |||||||||||
Net loss | $ 1,471,000 | |||||||||||
Ample Organics [Member] | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Transaction costs | 2,900,000 | |||||||||||
Revenues | 2.6 | |||||||||||
Net loss | $ 0.1 | |||||||||||
Acquisition of description | acquired 100% of the stock of Ample Organics for 3.3 million exchangeable shares of one of our wholly-owned subsidiaries. The exchangeable shares may be exchanged, at the option of the holder, for shares of Akerna common stock on a one-for-one basis, therefore the exchangeable shares issued were valued at $7.65 per share, the closing price of an equivalent share of Akerna common stock, $30.7 million was the aggregate value of the exchangeable shares. In addition to the stock consideration, we paid $5.5 million in cash, which was used to settle all of Ample's then outstanding debt. In addition to the stock and cash consideration, the agreement provides for contingent consideration of up to CAD$10,000,000, payable in exchangeable shares, payable if Ample's Recurring Revenue recognized during the 12 months after the acquisition date is CAD$9,000,000 or more. The contingent consideration amount is reduced by an amount equal to the product of CAD$6.67 multiplied by the difference between CAD$9,000,000 and the amount of Recurring Revenue realized during the 12 months following the acquisition. |
Balance Sheet Disclosures (Deta
Balance Sheet Disclosures (Details) - USD ($) | Dec. 31, 2020 | Jun. 30, 2020 | Jun. 30, 2019 |
Balance Sheet Disclosures [Abstract] | |||
Software and technology | $ 480,651 | $ 571,695 | $ 237,930 |
Professional services, dues and subscriptions | 826,195 | 473,731 | 169,804 |
Insurance | 243,222 | 105,814 | 159,940 |
Lease deposit | 227,718 | ||
Unbilled receivable | 612,446 | ||
Other | 68,495 | 64,101 | 10,000 |
Total prepaid expenses and other current assets | $ 2,458,727 | $ 1,215,341 | $ 577,674 |
Balance Sheet Disclosures (De_2
Balance Sheet Disclosures (Details 1) - USD ($) | Dec. 31, 2020 | Jun. 30, 2020 | Jun. 30, 2019 |
Balance Sheet Disclosures [Abstract] | |||
Accounts payable | $ 513,610 | $ 1,443,895 | $ 1,317,566 |
Professional fees | 333,709 | 2,273,659 | 49,205 |
Sales taxes | 216,367 | 59,825 | 36,358 |
Compensation | 311,379 | 260,042 | 354,724 |
Contractors | 1,281,857 | 782,366 | 19,557 |
Other | 531,654 | 42,141 | 40,706 |
Total accounts payable and accrued liabilities | $ 3,188,576 | $ 4,861,928 | $ 1,818,116 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets, Net (Details) - USD ($) | 6 Months Ended | 12 Months Ended |
Dec. 31, 2020 | Jun. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Balance at beginning of year | $ 20,254,309 | |
Additions due to acquisitions | (14,300) | (20,254,309) |
Goodwill impairment related to Ample | (4,172,000) | |
Balance at end of year | $ 41,874,527 | $ 20,254,309 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets, Net (Details 1) - USD ($) | 6 Months Ended | 12 Months Ended |
Dec. 31, 2020 | Jun. 30, 2020 | |
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | $ 11,805,000 | $ 8,221,394 |
Accumulated amortization | (1,701,205) | (727,419) |
Impairment | (2,715,000) | |
Total | $ 7,388,795 | $ 7,493,975 |
Acquired developed technology [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted average remaining amortization period (in years) | 3 years 9 months 7 days | 4 years 5 months 1 day |
Gross carrying amount | $ 8,220,000 | $ 7,370,000 |
Accumulated amortization | (1,434,155) | (679,696) |
Impairment | (2,591,920) | |
Total | $ 4,193,925 | $ 6,690,304 |
Acquired trade names [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted average remaining amortization period (in years) | 5 years 1 month 13 days | 7 years 4 months 24 days |
Gross carrying amount | $ 705,000 | $ 420,000 |
Accumulated amortization | (97,676) | (23,248) |
Impairment | (123,080) | |
Total | $ 484,244 | $ 396,752 |
Customer relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted average remaining amortization period (in years) | 13 years 14 days | 1 year 9 months |
Gross carrying amount | $ 2,880,000 | $ 220,000 |
Accumulated amortization | (169,374) | (24,475) |
Impairment | ||
Total | 2,710,626 | 195,525 |
Other intangible assets, not yet placed into service [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | 211,394 | |
Accumulated amortization | ||
Impairment | ||
Total | $ 211,394 | |
Capitalized software - In-service [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted average remaining amortization period (in years) | 1 year 7 months 13 days | 1 year 10 months 10 days |
Gross carrying amount | $ 4,593,512 | $ 2,852,044 |
Accumulated amortization | (1,401,953) | (560,528) |
Impairment | ||
Total | 3,191,559 | 2,291,516 |
Capitalized software - Work in Progress [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | 734,180 | 337,788 |
Accumulated amortization | ||
Impairment | ||
Total | 734,180 | 337,788 |
Total Capitalized Software [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | 5,327,692 | 3,189,832 |
Accumulated amortization | (1,401,953) | (560,528) |
Impairment | ||
Total | 3,925,739 | 2,629,304 |
Total finite-lived intangible assets [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | 17,132,692 | 11,411,226 |
Accumulated amortization | (3,103,158) | (1,287,947) |
Impairment | (2,715,000) | |
Total | $ 11,314,534 | $ 10,123,279 |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets, Net (Details 2) | Dec. 31, 2020USD ($) |
Finite-Lived Intangible Assets [Line Items] | |
Thereafter | |
Acquired Intangibles Assets [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
2021 | 1,656,991 |
2022 | 1,501,654 |
2023 | 1,239,864 |
2024 | 1,036,991 |
2025 | 243,436 |
Thereafter | 1,709,859 |
Total | 7,388,795 |
Capitalized Software [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
2021 | 2,040,462 |
2022 | 908,094 |
2023 | 105,498 |
2024 | 94,463 |
2025 | 43,042 |
Total | $ 3,191,559 |
Goodwill and Intangible Asset_6
Goodwill and Intangible Assets, Net (Details Textual) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended |
Dec. 31, 2020 | Jun. 30, 2020 | |
Finite-Lived Intangible Assets [Line Items] | ||
Amortization expense of intangible assets | $ 1.8 | $ 1.3 |
Impairment of goodwill | 4.2 | |
Solo [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Impairment of goodwill | $ 2.7 | |
Akerna Reporting Unit [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighting to the market approach, percentage | 100.00% | |
Ample Reporting Unit [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighting to the market approach, percentage | 50.00% | |
Weighted to the income approach, percentage | 50.00% | |
Impairment of goodwill | $ 4.2 |
Fixed assets, net (Details)
Fixed assets, net (Details) - USD ($) | Dec. 31, 2020 | Jun. 30, 2020 | Jun. 30, 2019 |
Property, Plant and Equipment [Line Items] | |||
Fixed assets, gross | $ 1,306,856 | $ 159,046 | |
Less: accumulated depreciation | (113,423) | (27,951) | |
Fixed assets, net | 1,193,433 | 131,095 | |
Furniture and computer equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Fixed assets, gross | 131,300 | 73,048 | |
Leasehold improvements [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Fixed assets, gross | $ 1,175,556 | $ 85,998 |
Fixed assets, net (Details Text
Fixed assets, net (Details Textual) - USD ($) | 6 Months Ended | 12 Months Ended |
Dec. 31, 2020 | Jun. 30, 2020 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 240,743 | $ 27,951 |
Sale of furniture and computer equipment | 25,561 | |
Cost of furniture and computer equipment | 191,389 | |
Accumulated depreciation | 106,555 | |
Loss on disposals | $ 59,273 |
Equity Method Investment and _2
Equity Method Investment and Related Party Transaction (Details) - USD ($) | Oct. 07, 2019 | Dec. 31, 2020 | Jan. 15, 2020 |
Defined Benefit Plan Disclosure [Line Items] | |||
Convertible into shares of common stock per share | $ 9 | ||
Carrying value of our initial investment | $ 250,000 | ||
Description of Techmagic | an amount of $291,000. When we acquired Solo in January 2020, we recognized a preacquisition liability of payable to TechMagic of $265,000. Following our acquisition and for the remainder of our fiscal year ended June 30, 2020, we received invoices totaling an aggregate additional amount of $392,000. The invoices set forth services that TechMagic purports to have provided to Solo regarding development of mobile software applications for MJF and Solo between March and September 2020. Mr. Ashesh Shah, our Chief Technology Officer from the date of the Solo acquisition through June 30, 2020, formerly the president of Solo and as of December 31, 2020, a minority holder of common stock, to our knowledge, the founder and one of the principal managers of TechMagic. The invoices state that the services were rendered pursuant to the terms of an agreement regarding the development of mobile software products for Solo, entered into between Solo and TechMagic at a time when Mr. Shah was a principal at both entities. As of December 31, 2020, a $553,000 payable to TechMagic was included in accounts payable and accrued liabilities on our consolidated balance sheet | ||
Zol Solutions, Inc. [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Preferred stock purchased shares | 203,000 | ||
Convertible into shares of common stock per share | $ 1.232 | ||
Preferred stock purchased share value | $ 250,000 | ||
Equity loss of investee | $ 16,336 |
Long Term Debt (Details)
Long Term Debt (Details) - USD ($) | Dec. 31, 2020 | Jun. 30, 2020 | Jun. 30, 2019 |
Line of Credit Facility [Abstract] | |||
Convertible Notes (at fair value) | $ 13,398,000 | ||
PPP loan | 2,204,600 | ||
Subtotal | 15,602,600 | ||
Less: current maturities | (11,707,363) | ||
Total long-term debt, less current portion | $ 3,895,237 | $ 10,200,236 |
Long Term Debt (Details 1)
Long Term Debt (Details 1) | Dec. 31, 2020USD ($) |
Line of Credit Facility [Abstract] | |
2021 | $ 11,707,363 |
2022 | 5,669,965 |
Aggregate maturities | 17,377,328 |
Original issue discount on Convertible Notes | (2,040,000) |
Unrealized change in fair value of Convertible Notes | 265,272 |
Long term debt outstanding | $ 15,602,600 |
Long Term Debt (Details Textual
Long Term Debt (Details Textuals) - USD ($) | Feb. 02, 2021 | Jan. 04, 2021 | Jun. 09, 2020 | Jun. 08, 2020 | Apr. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Jun. 30, 2020 | Jun. 30, 2019 |
Debt Instrument [Line Items] | |||||||||
Default interest rate | 15.00% | ||||||||
Principal portion of convertible debt | $ 1,000 | ||||||||
Original issue discount percentage | 12.00% | ||||||||
Decrease in convertible debt | $ 800,000 | ||||||||
Instrument-specific credit risk | $ 100,000 | ||||||||
Convertible notes | 13,400,000 | 14,100,000 | |||||||
Convertible notes decreased | 14,960,000 | 13,398,000 | 14,131,000 | ||||||
Convertible Notes increased | 1,000,000 | ||||||||
Convertible notes on issuance amount | $ 300,000 | $ 15 | |||||||
Conversion price percentage | 80.00% | ||||||||
Conversion price | $ 11.5 | $ 11.5 | $ 11.5 | ||||||
Original issue discount on holders | $ 880 | ||||||||
Face value of the notes | $ 17,000,000 | $ 1,800,000 | |||||||
Unrealized (loss) gains on convertible notes | $ (133,000) | $ 63,000 | |||||||
Description of loan | the PPP Loan, from a lender in the aggregate amount of $2.2 million pursuant to the Paycheck Protection Program under the Coronavirus Aid, Relief, and Economic Security Act, or the CARES Act. The PPP Loan is evidenced by a promissory note dated April 21, 2020, the Note. The PPP Loan bears interest at a fixed rate of 1.0% per annum, with the first six months of interest deferred from the date of the Note, has an initial term of two years from the date of the Note, and is unsecured and guaranteed by the Small Business Administration. We may prepay up to 20% of the PPP Loan amount at any time prior to maturity with no prepayment penalties. We must pay all accrued interest if we prepay greater than 20% of the PPP Loan amount and the PPP Loan has been sold on the secondary market. The Note provides for customary events of default. The PPP Loan may be accelerated upon the occurrence of an event of default. The PPP Loan may be forgiven in accordance with the terms of the CARES Act. The principal amount of the PPP Loan not forgiven and accrued interest is to be repaid in 18 equal monthly installments beginning seven months from the date of the disbursement of the PPP Loan. We applied for the PPP Loan and received the proceeds from the PPP Loan prior to the issuance of the recent guidance from the United States Treasury Department and U.S. Small Business Administration on April 23, 2020. We are currently evaluating the impact this guidance has on Akerna and the PPP Loan. | ||||||||
Conversion price floor | $ 1.92 | ||||||||
Other expense | $ 900,000 | 700,000 | |||||||
Settlement in cash | $ 1,500,000 | ||||||||
Subsequent Event [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Installment amount | $ 4,400,000 | $ 2,062,500 | |||||||
Convertible Debt [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Conversion price | $ 11.50 | ||||||||
Unrealized (loss) gains on convertible notes | $ 100,000 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) | 6 Months Ended | 12 Months Ended | |
Dec. 31, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | |
Shares under warrants | |||
Beginning balance, outstanding | 5,813,804 | 6,183,115 | |
Issued | |||
Exercised | (369,311) | ||
Expired/cancelled | |||
Ending balance, outstanding | 5,813,804 | 5,813,804 | 6,183,115 |
Weighted average exercise price | |||
Beginning balance, outstanding | $ 11.50 | $ 11.50 | |
Issued | |||
Exercised | |||
Expired/cancelled | |||
Ending balance, outstanding | $ 11.50 | $ 11.50 | $ 11.50 |
Weighted average remaining life | |||
Beginning balance, outstanding | 4 years 11 months 19 days | ||
Ending balance, outstanding | 3 years 4 months 13 days | 3 years 11 months 19 days | |
AggregateIntrinsicValueAbstract | |||
Ending balance, outstanding | $ 2,473,000 |
Stockholders' Equity (Details T
Stockholders' Equity (Details Textual) - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Oct. 30, 2020 | Dec. 31, 2020 | Jun. 30, 2020 | Sep. 01, 2020 | Jan. 15, 2020 | Jun. 30, 2019 | Jun. 17, 2019 | |
Common stock, shares authorized | 75,000,000 | 75,000,000 | 10,589,746 | ||||
Common stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||
Preferred stock, shares authorized | 5,000,000 | 5,000,000 | 5,000,000 | ||||
Preferred stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||
Sale of stock, description | we sold 5,750,000 units at a purchase price of $10.00 per unit, inclusive of 750,000 units sold to the underwriters on February 8, 2018, upon the underwriters’ election to fully exercise their over-allotment option. | ||||||
Issue of Class A common stock | 2,667,349 | 4,798,271 | |||||
Proceeds from mergers | $ 18 | ||||||
Merger related expense | $ 4.4 | ||||||
Exercise price | $ 11.50 | $ 10.16 | |||||
Convertible into shares of common stock per share | $ 9 | ||||||
IPO [Member] | |||||||
Gross proceeds | $ 12 | ||||||
Convertible into shares of common stock per share | $ 2.40 | ||||||
Proceeds from offering cost | $ 1 | ||||||
Proceeds from net | $ 11 | ||||||
Sale of stock | 5,000,000 | ||||||
Private Placement [Member] | |||||||
Sale of stock, description | The Company also provided each investor the ability to purchase additional shares of Akerna common stock at a price of $10.21 per share, up to their pro rata share of the 901,074 Private Placement Shares purchased. | ||||||
Issue of Class A common stock | 901,074 | ||||||
Aggregate purchase price | $ 9.2 |
Reverse Merger and Private Plac
Reverse Merger and Private Placement (Details) - $ / shares | Jun. 17, 2019 | Dec. 31, 2020 |
Number of shares unvested | 215,063 | |
Number of shares vested | 283,010 | |
Price per share | $ 10.16 | $ 11.50 |
Common stock issued for consideration | 6,520,099 | |
Merger agreement, description | resulting in the recognition of approximately $3.4 million on June 17, 2019 and approximately $2.1 million of compensation expense related to unvested restricted shares such profit interest units be recognized over the remaining vesting period of 3 years. |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details 1) - $ / shares | 6 Months Ended | 12 Months Ended |
Dec. 31, 2020 | Jun. 30, 2020 | |
Restricted Shares | ||
Beginning balance, Nonvested | 72,313 | 215,063 |
Granted | ||
Vested | 8,024 | 88,659 |
Forfeited | 54,091 | |
Ending balance, Nonvested | 64,289 | 72,313 |
Restricted Stock Units | ||
Beginning balance | 465,794 | |
Granted | 429,974 | 571,229 |
Vested | 157,350 | 26,965 |
Forfeited | 43,906 | 78,470 |
Ending balance | 694,512 | 465,794 |
Total | ||
Beginning balance | 538,107 | 215,063 |
Granted | 429,974 | 571,229 |
Vested | 165,374 | 115,624 |
Forfeited | 132,561 | 43,906 |
Ending balance | 758,801 | 538,107 |
Weighted Average Grant Date Fair Value | ||
Beginning balance | $ 6.56 | $ 11.99 |
Granted | 4.88 | 7.24 |
Vested | 5.08 | 7.25 |
Forfeited | 6.83 | 10.83 |
Ending balance | $ 6.77 | $ 6.56 |
Stock-Based Compensation (Det_2
Stock-Based Compensation (Details Textual) - USD ($) | 1 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Jun. 26, 2020 | Dec. 31, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2018 | Sep. 01, 2020 | Jun. 17, 2019 | |
Common stock, shares authorized | 75,000,000 | 75,000,000 | 10,589,746 | ||||
Common stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||
Preferred stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||
Preferred stock, shares authorized | 5,000,000 | 5,000,000 | 5,000,000 | ||||
Preferred stock, shares issued | 0 | 0 | 0 | ||||
Preferred stock, shares outstanding | 0 | 0 | 0 | ||||
Issuance of preferred shares | 0 | 0 | 0 | ||||
Common stock issued for cash consideration | 113,375 | ||||||
Proceeds from the issuance of common stock | $ 12,000,000 | $ 10,000,000 | |||||
One-time charge | $ 3,400,000 | ||||||
Sale of stock, description | we sold 5,750,000 units at a purchase price of $10.00 per unit, inclusive of 750,000 units sold to the underwriters on February 8, 2018, upon the underwriters’ election to fully exercise their over-allotment option. | ||||||
Price per share | $ 11.50 | $ 10.16 | |||||
Options exercised | 2,667,349 | 4,798,271 | |||||
Initial public offering, shares | 113,375 | ||||||
Units sold to the underwriters | $ 11,032,380 | $ 10,000,000 | |||||
Purchase price | $ 3.55 | ||||||
Maximum [Member] | |||||||
Shares authorized for issuance | 1,565,038 | ||||||
Minimum [Member] | |||||||
Shares authorized for issuance | 525,000 | ||||||
Equity Incentive Plan [Member] | |||||||
Common stock reserved | 1,040,038 | ||||||
Public warrant [Member] | |||||||
Sale of stock, description | The Company sold 5,750,000 units at a purchase price of $10.00 per unit, inclusive of 750,000 units sold to the underwriters on February 8, 2018 upon the underwriters’ election to fully exercise their over-allotment option. | ||||||
Private warrant [Member] | |||||||
Sale of stock, description | An affiliated party purchased an aggregate of 225,000 units at $10.00 per unit, for an aggregate purchase price of $2,250,000. On February 8, 2018, the MTech consummated the sale of an additional 18,750 private units at a price of $10.00 per unit generating gross proceeds of $187,500. Each unit consists of one share of MTech’s common stock and one warrant (“Private Warrants”). | ||||||
Restricted Shares [Member] | |||||||
Sale of stock, description | Additional 107,618 Restricted Shares were granted (402,824 PIUs before retroactively applying the exchange ratio), 68,794 Restricted Shares were forfeited (257,500 PIUs before retroactively applying the exchange ratio), and 118,705 Restricted Shares vested (444,324 PIUs before retroactively applying the exchange ratio). At June 30, 2019, there were 215,063 unvested Restricted Shares outstanding (805,000 PIUs before retroactively applying the exchange ratio) | 181,000 Restricted Shares were granted (677,500 PIUs before retroactively applying the exchange ratio), 64,785 Restricted Shares were forfeited (242,500 PIUs before retroactively applying the exchange ratio), and 75,406 Restricted Shares vested (282,250 PIUs before retroactively applying the exchange ratio). At June 30, 2018, there were 294,944 Restricted Shares outstanding (1,104,000 PIUs before retroactively applying the exchange ratio). | |||||
Stock-based compensation expenses related to unvested restricted shares | $ 1,300,000 | $ 1,300,000 | |||||
Estimated remaining vesting period | 3 years 1 month 6 days | ||||||
Unrecognized costs | $ 4,400,000 | ||||||
Compensation cost capitalized | $ 100,000 | $ 100,000 | |||||
IPO [Member] | |||||||
Sale of stock, description | There were also 250,000 options sold to an affiliate party to purchase up to 250,000 units exercisable at $10.00 per unit (“Option Shares”). The unit purchase option could be exercised for cash or on a cashless basis, at the holder’s option. Each unit consisted of one share of Company’s common stock, par value $0.0001 per share, and one warrant entitling the holder to purchase one share of Company’s common stock. The unit purchase option was exercised on a cashless basis into 189,365 shares of common stock and 189,365 warrants, which were outstanding as of June 30, 2019. | ||||||
Private Placement [Member] | |||||||
Sale of stock, description | The Company also provided each investor the ability to purchase additional shares of Akerna common stock at a price of $10.21 per share, up to their pro rata share of the 901,074 Private Placement Shares purchased. | ||||||
Options exercised | 901,074 |
Loss Per Share (Details)
Loss Per Share (Details) - shares | 6 Months Ended | 12 Months Ended | |
Dec. 31, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | |
Class of Stock [Line Items] | |||
Fully diluted | 10,559,322 | 8,151,424 | 6,398,178 |
Shares issuable upon exchange of Exchangeable Shares [Member] | |||
Class of Stock [Line Items] | |||
Fully diluted | 2,667,349 | ||
Shares of common stock issuable in upon conversion of Convertible Notes [Member] | |||
Class of Stock [Line Items] | |||
Fully diluted | 1,319,368 | 1,936,845 | |
Warrants [Member] | |||
Class of Stock [Line Items] | |||
Fully diluted | 5,813,804 | 5,813,804 | 6,183,115 |
Restricted Stock Units [Member] | |||
Class of Stock [Line Items] | |||
Fully diluted | 694,512 | 325,121 | |
Restricted Stock Awards [Member] | |||
Class of Stock [Line Items] | |||
Fully diluted | 64,289 | 75,654 | 215,063 |
Fair Value (Details)
Fair Value (Details) - USD ($) | 6 Months Ended | 12 Months Ended |
Dec. 31, 2020 | Jun. 30, 2020 | |
Fair Value Disclosures [Abstract] | ||
Beginning fair value balance on issue date | $ 14,131,000 | |
Payments on Convertible Notes | (1,827,273) | |
Change in fair value reported in the statements of operations | 961,273 | $ (766,000) |
Change in fair value reported in other comprehensive income | 133,000 | (63,000) |
Ending fair value balance | $ 13,398,000 | $ 14,131,000 |
Fair Value (Details 1)
Fair Value (Details 1) - USD ($) | 6 Months Ended | 12 Months Ended | |
Dec. 31, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Face value principal payable | $ 15,172,272 | $ 17,000,000 | $ 17,000,000 |
Original conversion price | $ 11.5 | $ 11.5 | $ 11.5 |
Value of Common Stock | $ 3.24 | $ 8.8 | $ 10.28 |
Expected term (years) | 2 years 3 months 18 days | 2 years 10 months 24 days | 3 years |
Volatility | 77.00% | 45.00% | 45.00% |
Market yield (range) | 23.90% | ||
Risk free rate | 0.10% | 0.20% | 0.20% |
Minimum [Member] | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Market yield (range) | 27.10% | 23.30% | |
Maximum [Member] | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Market yield (range) | 27.20% | 23.40% |
Fair Value (Details Textual)
Fair Value (Details Textual) | Jul. 07, 2020USD ($) | Apr. 08, 2020USD ($) | Jan. 15, 2020USD ($) | Dec. 31, 2020CAD ($) | Dec. 31, 2020USD ($) | Jun. 30, 2020USD ($) | Dec. 31, 2020USD ($) | Jun. 09, 2020USD ($) |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||||||
Principal amount | $ 17,000,000 | |||||||
Purchase price | $ 15,000,000 | |||||||
Settled value of the contingent consideration | ||||||||
Gain on settlement of the contingent consideration liability | 998,000 | |||||||
Trellis Solutions, Inc [Member] | ||||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||||||
Fair value of the contingent consideration | $ 0 | $ 998,000 | ||||||
Settled value of the contingent consideration | $ 3,529 | |||||||
Solo Sciences, Inc. [Member] | ||||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||||||
Description of contingent consideration | (i) $0.01 per solo*TAGTM and solo*CODETM sold or (ii) 7% of net revenue. The fees were to be paid annually until the earlier of: (1) our shares trading above $12 per share for any consecutive 20 trading days in a 30-day period; (b) upon our no longer owning a majority stake in Solo; or (c) upon expiration of the patents related to solo*TAGTM and solo*CODETM, which is December 1, 2029. | (i) $0.01 per solo*TAGTM and solo*CODETM sold or (ii) 7% of net revenue. The fees were to be paid annually until the earlier of: (1) our shares trading above $12 per share for any consecutive 20 trading days in a 30-day period; (b) upon our no longer owning a majority stake in Solo; or (c) upon expiration of the patents related to solo*TAGTM and solo*CODETM, which is December 1, 2029. | ||||||
Fair value of the contingent consideration | 389,000 | |||||||
Settled value of the contingent consideration | $ 17,939 | $ 0 | ||||||
Gain on settlement of the contingent consideration liability | $ 389,000 | |||||||
Ample Organics [Member] | ||||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||||||
Description of contingent consideration | The contingent consideration amount is reduced by an amount equal to the product of CAD$6.67 multiplied by the difference between CAD$9,000,000and the amount of Recurring Revenue realized during the twelve months following the acquisition. | The contingent consideration amount is reduced by an amount equal to the product of CAD$6.67 multiplied by the difference between CAD$9,000,000and the amount of Recurring Revenue realized during the twelve months following the acquisition. | ||||||
Fair value of the contingent consideration | $ 10,000,000 | $ 604,000 | ||||||
Settled value of the contingent consideration | $ 31,531 | $ 0 | ||||||
Gain on settlement of the contingent consideration liability | $ 604,000 | |||||||
Recurring revenue recognized | $ 9,000,000 |
Commitments and Contingencies_2
Commitments and Contingencies (Details) | Dec. 31, 2020USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2021 | $ 416 |
2022 | 415 |
2023 | 444 |
2024 | 447 |
2025 | 490 |
2026 and thereafter | 1,031 |
Total | $ 3,243 |
Commitments and Contingencies_3
Commitments and Contingencies (Details Textual) - USD ($) | Dec. 04, 2020 | Dec. 31, 2020 | Jun. 30, 2020 | Jun. 30, 2019 |
Rent expense | $ 552,861 | $ 299,629 | $ 151,458 | |
Future minimum lease payments two years | 415 | |||
Future minimum lease payments next 12 months | 416 | |||
Restricted cash | 500,000 | 500,000 | 500,000 | |
security deposit | 41,250 | |||
Termination fee | $ 402,480 | |||
Common stock issued for cash consideration | 113,375 | |||
Share price | $ 3.55 | |||
Business litigation description | TechMagic USA LLC filed suit against our wholly-owned subsidiary, Solo, in Massachusetts Superior Court, Department Business Litigation, seeking recovery of up to approximately $1.07 million for unpaid invoices pursuant to a Master Services Agreement dated February 5, 2018 by and between TechMagic and Solo. The invoices set forth services that TechMagic USA LLC purports to have provided to Solo regarding development of mobile software applications for MJF and Solo between March and November 2020 totaling approximately $767,000. During our fiscal year ended June 30, 2020, we received invoices totaling an aggregate amount of approximately $392,000. After our year ended June 30, 2020, through December 31, 2020, we have received invoices totaling an aggregate amount of approximately $375,000. The suit seeks continued fees under the Master Services Agreement through the end of January 2021. Akerna provided a notice of termination of the Master Services Agreement on November 23, 2020 and the parties dispute the effective date of the termination. Solo disputes the validity of the invoices, in whole or in part, and intends to defend the suit vigorously. Mr. Ashesh Shah, formerly the president of Solo and currently the holder of 6.1% of our issued and outstanding shares of common stock is, to our knowledge, the founder and one of the principal managers of TechMagic USA LLC. As of December 31, 2020, we recognized a settlement accrual of $0.6 million. | |||
Line of Credit [Member] | ||||
Restricted cash | $ 500,000 | |||
Letter-of-credit with a bank | $ 500,000 | $ 500,000 | $ 500,000 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 6 Months Ended | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Current income taxes | ||||
U.S. federal | $ 30,985 | |||
U.S. state | 200 | |||
Total current income taxes | 200 | 30,985 | ||
Deferred income taxes | ||||
U.S. federal | ||||
U.S. state | ||||
Total deferred income tax benefit |
Income Taxes (Details 1)
Income Taxes (Details 1) - USD ($) | 6 Months Ended | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Income tax expense and rate attributable to: | ||||
Federal | $ (3,560,998) | $ (3,255,706) | $ (2,509,246) | |
State, net of federal benefit | (553,871) | (862,690) | (13,452) | |
Foreign tax rate less than federal rate | 29,617 | (2,645) | ||
Permanent differences | 1,263,151 | 312,525 | ||
Rate change | 60,220 | |||
Restricted stock awards | 816,505 | |||
Changes in valuation allowance | 2,762,081 | 3,884,440 | 85,455 | |
Provision to return adjustment | (45,134) | |||
Losses from flow-through entity not subject to tax | 1,640,066 | |||
Other adjustments | 195 | (19,328) | ||
Effective income tax expense | $ 200 | $ 30,985 |
Income Taxes (Details 2)
Income Taxes (Details 2) - USD ($) | Dec. 31, 2020 | Jun. 30, 2020 | Dec. 31, 2019 | Jun. 30, 2019 |
Noncurrent deferred tax assets: | ||||
Employee compensation | $ 679,106 | $ 378,003 | ||
Debt issuance costs | 343,612 | 323,183 | ||
Revenue recognition | 156,022 | 22,226 | ||
Settlement accrual | 182,896 | |||
Fixed assets | 831,196 | |||
Federal and state net operating loss | 6,337,897 | 4,082,297 | 63,229 | |
Foreign net operating loss | 2,586,671 | 258,083 | ||
Other | 27,410 | |||
Total deferred tax assets | 10,988,788 | 5,197,588 | 85,455 | |
Noncurrent deferred tax liabilities: | ||||
Fixed assets | (653,819) | |||
Intangibles | (2,717,717) | (1,808,960) | ||
Deferred tax liabilities | (2,717,717) | (2,462,779) | ||
Valuation allowance | (8,271,071) | (2,734,809) | (85,455) | |
Deferred taxes after valuation allowance |
Income Taxes (Details Textual)
Income Taxes (Details Textual) - USD ($) | 6 Months Ended | |||
Dec. 31, 2020 | Jun. 30, 2020 | Apr. 30, 2020 | Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | ||||
Net operating losses | $ 24,500,000 | |||
Change in valuation allowance | 5,500,000 | |||
Uncertain tax position | $ 50,000 | |||
Valuation allowance | $ 8,271,071 | $ 2,734,809 | $ 85,455 | |
Income taxes, description | We have deferred tax assets related to foreign net operating loss carryforward, which begin to expire in 2028, in the amount of $9.8 million. | |||
Aggregate amount of loan | $ 2,200,000 | |||
Purchase accounting remainder value | $ 2.7 | |||
Deferred Tax Liabilities, Deferred Expense | $ 2.8 |
Revisions of Financial Statem_3
Revisions of Financial Statements for the Fiscal Quarters during Fiscal Year 2020 (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Cost of revenue | $ 3,141,041 | $ 2,994,940 | $ 6,209,724 | $ 4,633,844 | ||
Gross profit | 4,683,743 | 3,504,153 | 6,363,552 | 6,189,273 | ||
Product development | 3,166,088 | 1,234,403 | 3,206,310 | 5,565,097 | ||
Net loss | $ (16,966,149) | $ (6,090,027) | $ (16,384,104) | $ (12,403,215) | ||
Net loss per share | $ (1.06) | $ (0.56) | $ (1.31) | $ (2.05) | ||
As Reported [Member] | ||||||
Cost of revenue | $ 1,420,909 | $ 1,638,840 | $ 3,036,201 | |||
Gross profit | 1,649,637 | 1,667,363 | 3,462,892 | |||
Product development | 1,632,353 | 1,261,509 | 2,392,389 | |||
Selling, general and administrative | 5,500,837 | 4,796,404 | 8,380,219 | |||
Net loss | $ (5,348,980) | $ (4,338,536) | $ (7,184,607) | |||
Net loss per share | $ (0.43) | $ (0.40) | $ (0.66) | |||
Adjustment [Member] | ||||||
Cost of revenue | $ (24,690) | $ (23,601) | $ (41,261) | |||
Gross profit | 24,690 | 23,601 | 41,261 | |||
Product development | (757,566) | (638,008) | (1,157,986) | |||
Selling, general and administrative | 177,405 | 86,768 | 104,667 | |||
Net loss | $ 604,851 | $ 574,841 | $ 1,094,580 | |||
Net loss per share | ||||||
As Revised [Member] | ||||||
Cost of revenue | $ 1,396,219 | $ 1,615,239 | $ 2,994,940 | |||
Gross profit | 1,674,327 | 1,690,964 | 3,504,153 | |||
Product development | 874,787 | 623,501 | 1,234,403 | |||
Selling, general and administrative | 5,678,242 | 4,883,172 | 8,484,886 | |||
Net loss | $ (4,744,129) | $ (3,763,695) | $ (6,090,027) | |||
Net loss per share | $ (0.38) | $ (0.34) | $ (0.56) |
Uncategorized Items - kern-2020
Label | Element | Value |
Leasehold improvements | kern_Leaseholdimprovementsusefullife | Lesser of remaining lease term or useful life |
Long-Lived Assets | us-gaap_NoncurrentAssets | |
Long-Lived Assets | us-gaap_NoncurrentAssets | 10,254 |
Long-Lived Assets | us-gaap_NoncurrentAssets | $ 15,068 |
Minimum [Member] | ||
Property, Plant and Equipment, Useful Life | us-gaap_PropertyPlantAndEquipmentUsefulLife | 3 years |
Maximum [Member] | ||
Property, Plant and Equipment, Useful Life | us-gaap_PropertyPlantAndEquipmentUsefulLife | 7 years |
Canada | ||
Long-Lived Assets | us-gaap_NoncurrentAssets | |
Long-Lived Assets | us-gaap_NoncurrentAssets | 5,074 |
Long-Lived Assets | us-gaap_NoncurrentAssets | |
United States | ||
Long-Lived Assets | us-gaap_NoncurrentAssets | |
Long-Lived Assets | us-gaap_NoncurrentAssets | 9,994 |
Long-Lived Assets | us-gaap_NoncurrentAssets | $ 10,254 |