Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2022 | Nov. 10, 2022 | |
Document Information [Line Items] | ||
Entity Registrant Name | Akerna Corp. | |
Entity Central Index Key | 0001755953 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Type | 10-Q | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2022 | |
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 Common Stock, Shares Outstanding | 4,429,847 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Trading Symbol | KERN | |
Document Period End Date | Sep. 30, 2022 | |
Entity Tax Identification Number | 83-2242651 | |
Entity Address, Address Line One | 1550 Larimer Street | |
Entity Address, Address Line Two | #246 | |
Entity Address, City or Town | Denver | |
Entity Address, State or Province | CO | |
Entity Address, Postal Zip Code | 80202 | |
City Area Code | (888) | |
Local Phone Number | 932-6537 | |
Title of 12(b) Security | Common Stock, $0.0001 par value per share | |
Security Exchange Name | NASDAQ |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Current assets | ||
Cash | $ 2,490,662 | $ 13,934,265 |
Restricted cash | 7,008,261 | 508,261 |
Accounts receivable, net | 1,371,133 | 1,403,774 |
Prepaid expenses and other current assets | 2,330,032 | 2,383,764 |
Total current assets | 13,200,088 | 18,230,064 |
Fixed assets, net | 124,760 | 153,151 |
Investment, net | 226,101 | 226,101 |
Capitalized software, net | 6,009,163 | 7,311,676 |
Intangible assets, net | 17,005,584 | 21,609,794 |
Goodwill | 9,025,589 | 46,942,681 |
Other noncurrent assets | 9,700 | |
Total assets | 45,591,285 | 94,483,167 |
Current liabilities | ||
Accounts payable, accrued expenses and other accrued liabilities | 4,630,681 | 6,063,520 |
Contingent consideration payable | 3,300,000 | 6,300,000 |
Current portion of deferred revenue | 2,151,235 | 3,543,819 |
Current portion of long-term debt | 9,900,000 | 13,200,000 |
Derivative liability | 9,025 | 63,178 |
Total current liabilities | 19,990,941 | 29,170,517 |
Long-term portion of deferred revenue | 499,206 | 582,676 |
Long-term debt, less current portion | 4,575,000 | 4,105,000 |
Deferred income tax liabilities | 431,453 | 675,291 |
Total liabilities | 25,496,600 | 34,533,484 |
Commitments and contingencies (Note 9) | ||
Equity: | ||
Preferred stock, par value | ||
Common stock, par value $0.0001; 150,000,000 shares authorized, 4,023,294 and 1,550,094 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively | 402 | 155 |
Additional paid-in capital | 159,841,800 | 146,030,203 |
Accumulated other comprehensive income | 356,028 | 61,523 |
Accumulated deficit | (142,331,164) | (88,508,236) |
Total equity | 20,094,685 | 59,949,683 |
Total liabilities and equity | 45,591,285 | 94,483,167 |
Special voting preferred stock | ||
Equity: | ||
Preferred stock, par value | $ 2,227,619 | $ 2,366,038 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Sep. 30, 2022 | Dec. 31, 2021 |
Common stock par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 150,000,000 | 150,000,000 |
Common stock, shares issued (in shares) | 4,023,294 | 1,550,094 |
Common stock, shares outstanding (in shares) | 4,023,294 | 1,550,094 |
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized (in shares) | 5,000,000 | 5,000,000 |
Preferred stock, liquidation preference (in dollars per share) | $ 1 | |
Special voting preferred stock | ||
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized (in shares) | 1 | 1 |
Preferred stock, shares issued (in shares) | 1 | 1 |
Preferred stock, shares outstanding (in shares) | 1 | 1 |
Preferred stock, liquidation preference (in dollars per share) | $ 1 | $ 1 |
Exchangeable shares | ||
Preferred stock, no par value (in dollars per share) | $ 0 | $ 0 |
Preferred stock, shares issued (in shares) | 291,192 | 309,286 |
Preferred stock, shares outstanding (in shares) | 291,192 | 309,286 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Revenue | ||||
Total revenue | $ 5,412,802 | $ 5,135,502 | $ 18,449,524 | $ 14,056,414 |
Cost of revenue | 2,051,862 | 1,971,382 | 6,091,511 | 5,339,929 |
Gross profit | 3,360,940 | 3,164,120 | 12,358,013 | 8,716,485 |
Operating expenses | ||||
Product development | 1,374,133 | 1,566,478 | 5,240,922 | 4,517,836 |
Sales and marketing | 1,882,980 | 2,002,461 | 8,304,411 | 5,564,519 |
General and administrative | 1,823,076 | 2,077,474 | 6,812,617 | 8,306,417 |
Depreciation and amortization | 2,118,739 | 1,238,420 | 6,094,963 | 3,605,435 |
Impairment of long-lived assets | 39,600,587 | |||
Change in fair value of contingent consideration | (3,000,000) | (3,000,000) | ||
Total operating expenses | 4,198,928 | 6,884,833 | 63,053,500 | 21,994,207 |
Loss from operations | (837,988) | (3,720,713) | (50,695,487) | (13,277,722) |
Other (expense) income | ||||
Interest (expense) income, net | (396,022) | (238,283) | (609,746) | (1,175,789) |
Change in fair value of convertible notes | (1,113,000) | (23,227) | (2,840,000) | (2,030,904) |
Change in fair value of derivative liability | 2,256 | 194,046 | 54,153 | 151,175 |
Gain on forgiveness of PPP Loan | 2,234,730 | 2,234,730 | ||
Other expense (income), net | 243 | |||
Total other (expense) income | (1,506,766) | 2,167,266 | (3,395,593) | (820,545) |
Net loss before income taxes and equity in losses of investee | (2,344,754) | (1,553,447) | (54,091,080) | (14,098,267) |
Income tax (expense) benefit | 40,666 | 268,152 | (10,570) | |
Equity in losses of investee | (7,564) | |||
Net loss | $ (2,304,088) | $ (1,553,447) | $ (53,822,928) | $ (14,116,401) |
Basic and diluted weighted average common shares outstanding (in shares) | 3,883,847 | 1,322,122 | 2,421,262 | 1,215,626 |
Basic and diluted net loss per common share (in dollars per share) | $ (0.59) | $ (1.17) | $ (22.23) | $ (11.61) |
Software | ||||
Revenue | ||||
Total revenue | $ 5,326,830 | $ 4,557,960 | $ 17,756,272 | $ 12,809,841 |
Consulting | ||||
Revenue | ||||
Total revenue | 76,500 | 551,402 | 618,809 | 1,135,033 |
Other revenue | ||||
Revenue | ||||
Total revenue | $ 9,472 | $ 26,140 | $ 74,443 | $ 111,540 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Loss (unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ (2,304,088) | $ (1,553,447) | $ (53,822,928) | $ (14,116,401) |
Other comprehensive (loss) income | ||||
Foreign currency translation | 27,676 | 63,905 | 4,505 | 65,858 |
Unrealized (loss) gain on convertible notes | 26,000 | (3,000) | 290,000 | (19,000) |
Comprehensive loss | $ (2,250,412) | $ (1,492,542) | $ (53,528,423) | $ (14,069,543) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Changes in Equity (Unaudited) - USD ($) | Total | Special voting preferred stock | Common | Additional Paid-In Capital | Accumulated Other Comprehensive Income | Accumulated Deficit |
Balance at Dec. 31, 2020 | $ 57,222,621 | $ 20,405,219 | $ 100 | $ 94,088,323 | $ (91,497) | $ (57,179,524) |
Balance, shares at Dec. 31, 2020 | 2,667,349 | 995,062 | ||||
Conversion of exchangeable shares to common stock | $ (17,452,724) | $ 11 | 17,452,713 | |||
Conversion of exchangeable shares to common stock, shares | (2,281,402) | 114,070 | ||||
Settlement of convertible notes | 11,610,587 | $ 15 | 11,610,572 | |||
Settlement of convertible notes, shares | 154,706 | |||||
Shares withheld for withholding taxes | (437,554) | (437,554) | ||||
Shares withheld for withholding taxes, shares | (4,018) | |||||
Shares issued in connection with Viridian Acquisition | 6,002,000 | $ 5 | 6,001,995 | |||
Shares issued in connection with Viridian Acquisition, Shares | 50,000 | |||||
Shares issued in connection with asset purchase | 300,000 | 300,000 | ||||
Shares issued in connection with asset purchase, shares | 4,167 | |||||
Stock-based compensation | 1,584,755 | 1,584,755 | ||||
Shares issued in connection with the ATM offering program | 1,828,116 | $ 3 | 1,828,113 | |||
Shares issued in connection with the ATM offering program, Shares | 27,819 | |||||
Settlement of liabilities with shares | 377,325 | $ 1 | 377,324 | |||
Settlement of liabilities with shares, shares | 5,085 | |||||
Restricted stock vesting | $ 1 | (1) | ||||
Restricted stock vesting shares | 11,571 | |||||
Forfeitures of restricted shares | ||||||
Forfeitures of restricted shares, shares | (67) | |||||
Foreign currency translation adjustments | 65,858 | 65,858 | ||||
Unrealized (loss) gain on convertible notes | (19,000) | (19,000) | ||||
Net loss | (14,116,401) | (14,116,401) | ||||
Balance at Sep. 30, 2021 | 64,418,307 | $ 2,952,495 | $ 136 | 132,806,240 | (44,639) | (71,295,925) |
Balance, shares at Sep. 30, 2021 | 385,947 | 1,358,395 | ||||
Balance at Jun. 30, 2021 | 61,962,363 | $ 7,951,203 | $ 127 | 123,859,055 | (105,544) | (69,742,478) |
Balance, shares at Jun. 30, 2021 | 1,039,373 | 1,266,621 | ||||
Conversion of exchangeable shares to common stock | $ (4,998,708) | $ 3 | 4,998,705 | |||
Conversion of exchangeable shares to common stock, shares | (653,426) | 32,671 | ||||
Settlement of convertible notes | 1,413,942 | $ 2 | 1,413,940 | |||
Settlement of convertible notes, shares | 23,532 | |||||
Shares withheld for withholding taxes | (103,707) | (103,707) | ||||
Shares withheld for withholding taxes, shares | (1,571) | |||||
Shares issued in connection with asset purchase | 300,000 | 300,000 | ||||
Shares issued in connection with asset purchase, shares | 4,167 | |||||
Stock-based compensation | 510,132 | 510,132 | ||||
Shares issued in connection with the ATM offering program | 1,828,119 | $ 3 | 1,828,116 | |||
Shares issued in connection with the ATM offering program, Shares | 27,819 | |||||
Restricted stock vesting | $ 1 | (1) | ||||
Restricted stock vesting shares | 5,156 | |||||
Foreign currency translation adjustments | 63,905 | 63,905 | ||||
Unrealized (loss) gain on convertible notes | (3,000) | (3,000) | ||||
Net loss | (1,553,447) | (1,553,447) | ||||
Balance at Sep. 30, 2021 | 64,418,307 | $ 2,952,495 | $ 136 | 132,806,240 | (44,639) | (71,295,925) |
Balance, shares at Sep. 30, 2021 | 385,947 | 1,358,395 | ||||
Balance at Dec. 31, 2021 | 59,949,683 | $ 2,366,038 | $ 155 | 146,030,203 | 61,523 | (88,508,236) |
Balance, shares at Dec. 31, 2021 | 309,286 | 1,550,094 | ||||
Conversion of exchangeable shares to common stock | $ (138,419) | 138,419 | ||||
Conversion of exchangeable shares to common stock, shares | (18,094) | 904 | ||||
Settlement of convertible notes | 3,925,500 | $ 21 | 3,925,479 | |||
Settlement of convertible notes, shares | 207,427 | |||||
Shares withheld for withholding taxes | (13,167) | (13,167) | ||||
Shares withheld for withholding taxes, shares | (558) | |||||
Shares issued in connection with Viridian Acquisition | (940,000) | $ (1) | (939,999) | |||
Shares issued in connection with Viridian Acquisition, Shares | (13,988) | |||||
Shares issued in connection with asset purchase | 9,178,961 | $ 217 | 9,178,744 | |||
Shares issued in connection with asset purchase, shares | 2,173,913 | |||||
Stock-based compensation | 661,423 | 661,423 | ||||
Shares issued in connection with the ATM offering program | 761,178 | $ 9 | 761,169 | |||
Shares issued in connection with the ATM offering program, Shares | 90,809 | |||||
Settlement of liabilities with shares | 49,530 | 49,530 | ||||
Settlement of liabilities with shares, shares | 1,463 | |||||
Restricted stock vesting | 50,000 | $ 1 | 49,999 | |||
Restricted stock vesting shares | 13,230 | |||||
Foreign currency translation adjustments | 4,505 | 4,505 | ||||
Unrealized (loss) gain on convertible notes | 290,000 | 290,000 | ||||
Net loss | (53,822,928) | (53,822,928) | ||||
Balance at Sep. 30, 2022 | 20,094,685 | $ 2,227,619 | $ 402 | 159,841,800 | 356,028 | (142,331,164) |
Balance, shares at Sep. 30, 2022 | 291,192 | 4,023,294 | ||||
Balance at Jun. 30, 2022 | 12,945,012 | $ 2,227,619 | $ 184 | 150,441,933 | 302,352 | (140,027,076) |
Balance, shares at Jun. 30, 2022 | 291,192 | 1,841,336 | ||||
Shares issued in connection with asset purchase | 9,178,961 | $ 217 | 9,178,744 | |||
Shares issued in connection with asset purchase, shares | 2,173,913 | |||||
Stock-based compensation | 196,124 | 196,124 | ||||
Restricted stock vesting | 25,000 | $ 1 | 24,999 | |||
Restricted stock vesting shares | 8,045 | |||||
Foreign currency translation adjustments | 27,676 | 27,676 | ||||
Unrealized (loss) gain on convertible notes | 26,000 | 26,000 | ||||
Net loss | (2,304,088) | (2,304,088) | ||||
Balance at Sep. 30, 2022 | $ 20,094,685 | $ 2,227,619 | $ 402 | $ 159,841,800 | $ 356,028 | $ (142,331,164) |
Balance, shares at Sep. 30, 2022 | 291,192 | 4,023,294 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Cash flows from operating activities | ||
Net loss | $ (53,822,928) | $ (14,116,401) |
Adjustment to reconcile net loss to net cash used in operating activities: | ||
Equity in losses of investee | 7,564 | |
Change in fair value of contingent consideration | (3,000,000) | |
Bad debt expense | 271,474 | 254,029 |
Stock-based compensation expense | 697,377 | 1,584,751 |
Loss on write off of fixed assets | 1,045,179 | |
Gain on forgiveness of PPP loan | (2,234,730) | |
Impairment of long-lived assets | 39,600,587 | |
Amortization of deferred contract cost | 275,949 | 356,528 |
Non-cash interest expense | 183,723 | 1,161,393 |
Depreciation and amortization | 6,094,963 | 3,605,435 |
Foreign currency loss | 4,718 | 21,496 |
Change in fair value of convertible notes | 2,840,000 | 2,030,904 |
Change in fair value of derivative liability | (54,153) | (151,175) |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | (313,176) | 462,482 |
Prepaid expenses and other current and noncurrent assets | (215,228) | 66,246 |
Accounts payable, accrued expenses and other accrued liabilities | (1,356,709) | 1,756,671 |
Deferred income tax liabilities | (243,838) | |
Deferred revenue | (1,413,665) | (927,916) |
Net cash used in operating activities | (10,450,906) | (5,077,544) |
Cash flows from investing activities | ||
Developed software additions | (3,324,029) | (3,354,453) |
Fixed asset additions | (27,383) | (11,535) |
Cash returned from business combination working capital settlement | 400,000 | |
Net cash used in investing activities | (2,951,412) | (3,365,988) |
Cash flows from financing activities | ||
Value of shares withheld related to tax withholdings | (13,167) | (437,554) |
Proceeds from unit and pre-funded unit offering, net | 9,178,960 | |
Proceeds from exercise of pre-funded warrants | 1 | |
Principal payments of convertible notes | (1,432,273) | (1,164,706) |
Proceeds from the ATM offering program, net | 761,178 | 1,828,116 |
Net cash provided by financing activities | 8,494,699 | 225,856 |
Effect of exchange rate changes on cash and restricted cash | (35,984) | (5,915) |
Net change in cash and restricted cash | (4,943,603) | (8,223,591) |
Cash and restricted cash - beginning of period | 14,442,526 | 18,340,640 |
Cash and restricted cash - end of period | 9,498,923 | 10,117,049 |
Cash paid for interest | 234,227 | 105,882 |
Cash paid for income taxes, net of refunds received | 12,200 | 10,570 |
Supplemental disclosures of non-cash investing and financing activities: | ||
Settlement of convertible notes in common stock | 3,925,500 | 10,448,932 |
Conversion of exchangeable shares to common stock | 138,419 | 17,452,497 |
Settlement of other liabilities in common stock | 49,530 | 377,315 |
Stock-based compensation capitalized as software development | 14,046 | |
Vesting of restricted stock units | 50,000 | |
Capitalized software included in accrued expenses | 32,473 | |
Shares returned in connection with 365 Cannabis acquisition | 940,000 | |
365 Cannabis working capital reduction to accrued expenses | $ 160,000 |
Description of Business
Description of Business | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business | Note 1 - Description of Business Description of Business Akerna Corp., herein referred to as we, us, our, the Company or Akerna, through our wholly-owned subsidiaries MJ Freeway, LLC, or MJF, Trellis Solutions, Inc., or Trellis, Ample Organics, Inc, or Ample, solo sciences, inc., or Solo, Viridian Sciences Inc., or Viridian, and The NAV People, Inc. d.b.a. 365 Cannabis, or 365 Cannabis, provides enterprise software solutions that enable regulatory compliance and inventory management. Our proprietary, broad and growing suite of solutions are adaptable for industries in which interfacing with government regulatory agencies for compliance purposes is required, or where the tracking of organic materials from seed or plant to end products is desired. We develop products intended to assist states in monitoring licensed businesses’ compliance with state regulations and to help state-licensed businesses operate in compliance with such law. We provide our commercial software platform, MJ Platform®, Trellis®, Ample, Viridian and 365 Cannabis 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™. The integration of MJ Platform® and solo*CODE™ results in technology for consumers and brands that brings a consumer-facing mark designed to highlight the authenticity and signify transparency. Our Viridian and 365 Cannabis offerings are considered enterprise offerings while all other solutions are considered non-enterprise offerings that meet the needs of our small and medium-sized business, or SMB, customers. 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. Going Concern and Management ’ In accordance with the Financial Accounting Standards Board’s (“FASB”) standard on going concern, Accounting Standard Update ( “ ” Disclosure of Uncertainties about an Entity ’ “ ” The accompanying condensed consolidated financial statements have been prepared on the basis that we will continue as a going concern, which contemplates realization of assets and the satisfaction of liabilities in the normal course of business. However, since our inception we have experienced recurring losses from operations, used cash from operating activities, and relied on capital raising transactions to continue ongoing operations. During the nine months ended September 30, 2022 and September 30, 2021, we incurred losses from operations of $11.1 million, excluding impairments, and $13.3 million, respectively, and used cash in operating activities of $10.5 million and $ million, respectively. As of September 30, 2022, we had a working capital deficit of $6.8 million with $ million in cash available to fund future operations. Furthermore, on May 24, 2022, we received a notice (the “Notice”) from The Nasdaq Stock Market LLC indicating that the bid price of the Company’s common stock, par value $0.0001 per share (“Common Stock”), is not currently in compliance with the requirement to maintain a minimum bid price of $1.00 per share for continued listing on the Nasdaq Capital Market (the “Nasdaq Market”). The Notice has no immediate effect on the continued listing status of our Common Stock on the Nasdaq Market, and, therefore, our listing remains fully effective. We are provided a compliance period of 180 calendar days from the date of the Notice, or until November 21, 2022, to regain compliance with the minimum closing bid requirement. On November 8, 2022, we completed a reverse stock split of 20-for-1 (the “Reverse Stock Split”) to address our bid price compliance and believe that we will regain compliance with the bid price requirement by November 21, 2022. Collectively, these factors raise substantial doubt regarding the ability of the Company to continue as a going concern. Management’s plan for the Company to continue as a going concern includes several initiatives and actions including those impacting continuing costs, primarily labor and technology, including hosting and applications, working capital, our The most significant components of our plan include the following: (i) realizing annualized cost savings associated with the corporate restructuring initiative (the “Restructuring”) that we announced in May 2022 which resulted in a reduction in workforce and related operating costs (see Note 4), (ii) entering into an amendment and waiver agreement to the securities purchase agreement (the “SPA”) continuing a similar waiver provided by the holders on June 30, 2022, (vi) addressing the potential liquidity of our Common Stock and increasing the viability of our ATM Program in connection with the minimum listing requirements for the Nasdaq Market through the Reverse Stock Split that was approved by our shareholders on November 7, 2022 and effectuated at 12:01 a.m Eastern Standard Time on November 8, 2022 (see Note 10), (vii) conservatively managing our working capital through disciplined cost-containment efforts and strategic continuing to seek to expand our customer base and realize synergies as we continue to integrate our recent acquisitions with a focus on our core business units We anticipate that the initiatives and actions associated with our plan described above will provide us with sufficient liquidity in order to operate our business in the normal course for the remainder of 2022 due primarily to the fact that the debt service obligations associated with the Senior Convertible Notes have been deferred to the first half of 2023 and have effectively been substantially pre-funded with the amounts deposited into restricted accounts as required by the Convertible Notes Amendment. In the remainder of 2022, we plan to continue to rigorously explore potential financing alternatives and other strategic options. In addition to and to the extent practical in the future, based on market conditions, we will consider incremental offerings through the ATM Program. From September 30, 2022 through November 10, 2022, we have utilized $0.9 million of the total $3.5 million authorized by the ATM Program. The earn-out payment associated with a 2021 acquisition, which is intended to be made in shares of Common Stock, is scheduled to be settled by the end of December 2022 (see Note 3). If the seller elects for the settlement to be made in cash, it becomes subject to a reduction of 25 percent and could be deferred into the first quarter of 2023. If we are unable to secure other potential financing alternatives or fail to execute any other strategic options to raise sufficient additional funds through the first half of 2023, including through the ATM Program, address our liquidity needs and our ability to satisfy the scheduled maturity of our obligations under the Senior Convertible Notes. Such offerings may include the issuance of shares of Common Stock, warrants to purchase Common Stock, preferred stock, convertible debt or other instruments that may dilute the interests of our current shareholders. If we are required to raise additional capital as discussed above and if we cannot timely raise additional funds, we may be unable to meet the financial covenants of the Senior Convertible Notes, which could result in an event of default under those instruments which could adversely impact the Company. See the risks detailed in our Form 10-K under “Item 1A. Risk Factors – Risks Relating to our Convertible Debt”. Our ability to continue as a going concern is dependent upon our ability to successfully execute the plans described above and attain profitable operations. Despite the comprehensive scope of our plans, the inherent risks associated with their successful execution are not sufficient to fully overcome substantial doubt about our ability to continue as a going concern for year from the date of issuance of the consolidated financial statements. Accordingly, if we are unable to raise sufficient capital we may have to reduce operations which could significantly and adversely affect our results of operations. If we fail to meet the financial covenants of the Senior Convertible Notes and cannot obtain a waiver from such provisions or otherwise come to an agreement with the holders of our debt, such holders may declare a default on the debt which could subject our assets to seizure and sale, negatively impacting our business. The accompanying consolidated financial statements do not include any adjustments relating to the recoverability and classification of assets and liabilities that might be necessary if the Company is unable to continue as a going concern. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 2 - Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and with the instructions to the Quarterly Report on Form 10-Q and Article 8 of Regulation S-X for interim financial information. Accordingly, these financial statements do not include all of the information normally required by GAAP or Securities and Exchange Commission rules and regulations for complete financial statements. September 30, 2022 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2022. The condensed consolidated balance sheet as of December 31, 2021, has been derived from our audited financial statements at that date but does not include all disclosures and financial information required by GAAP for complete financial statements. The information included in this quarterly report on Form 10-Q should be read in conjunction with our consolidated financial statements and notes thereto for the period ended December 31, 2021, which were included in our report on Form 10-K filed on March 31 Principles of Consolidation Our accompanying consolidated financial statements include the accounts of Akerna and our wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. 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 consolidated financial statements and accompanying notes thereto. Our most significant estimates and assumptions are related to the valuation of acquisition-related assets and liabilities, capitalization of internal costs associated with software development, fair value measurements, impairment assessments, loss contingencies, valuation allowance associated with deferred tax assets, stock based compensation expense, and useful lives of long-lived intangible assets. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Accordingly, actual results could differ from those estimates. 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 $0.9 million $0.3 million December 31, 2021, respectively Concentrations of Credit Risk We grant credit in the normal course of business to customers in the United States and Canada. We periodically perform credit analysis and monitor the financial condition of our customers to reduce credit risk. During the nine months ended September 30, 2022 two % and 11% As of September 30, 2022, Warrants We evaluate warrants that we may issue from time to time under a two-step process provided in GAAP. The first step is intended to distinguish liabilities from equity. Warrants that could require cash settlement are generally classified as liabilities. For warrants that are considered outside of the scope of liability classification, a second step evaluates warrants as either a derivative subject to derivative accounting and disclosures or as equity instruments based upon the specific terms of the underlying warrant agreement and certain other factors associated with the our capital structure. Warrants that are indexed to the Company ’ Segment Reporting We operate our business as one operating segment. Operating segments are defined as components of an enterprise about which separate financial information is evaluated regularly by the chief operating decision maker ( “ ” In the following table, we disclose the combined gross balance of our fixed assets, capitalized software, and intangible assets by geographical location (in thousands): As of September 30, 2022 As of December 31, 2021 Long-lived assets: United States $ 28,234 $ 32,356 Canada 6,102 5,229 Total $ 34,336 $ 37,585 Adoption of Recent Accounting Pronouncements The FASB issued ASU No. 2016-02, Leases “ ” Leases “ ” The FASB issued ASU No. 2020-01, Clarifying the Interaction between Topic 321, Topic 323, and Topic 815 “ ” The FASB issued ASU No. 2021-04, Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options “ ” We adopted ASU 2021-04 effective January 1, 2022 and there was no material impact to our balance sheets and statements of operations. Recent Accounting Pronouncements Pending Adoption The FASB issued ASU No. 2016-13, Measurement of Credit Losses on Financial Instruments “ ” The FABS issued ASU No. 2020-06, Accounting for Convertible Instruments and Contracts in an Entity ’ “ ” ’ The FASB issued ASU No. 2021-08, Accounting for Contract Assets and Contract Liabilities from Contracts with Customers “ ” liabili Revenue from Contracts with Customers We are currently evaluating the impact this guidance will have on our consolidated financial statements. Subsequent Events Management has evaluated all of our activities through the issuance date of our condensed consolidated financial statements and has concluded that, with the exception of (i) the issuance of preferred stock in an offering that closed on October 4, 2022 and their subsequent redemption on November 9, 2022, (ii) the approval by our shareholders of t he Reverse Stock Split 402,345 The effectuation of the Reverse Stock Split has been applied retrospectively to all periods presented throughout these financial statements. Accordingly, all disclosures of shares of Common Stock, restricted stock awards and restricted stock units herein and any corresponding reference to market, conversion and exercise prices have been adjusted. The following table summarizes the relevant disclosures prior to and after the Reverse Stock Split: Prior to Reverse Split After Reverse Reverse Split Common stock outstanding as of: September 30, 2022 80,465,890 4,023,294 July 1, 2022 36,826,733 1,841,336 December 31, 2021 31,001,884 1,550,094 September 30, 2021 27,167,917 1,358,395 July 1, 2021 25,332,439 1,266,621 December 31, 2020 19,901,248 995,062 Common stock, par value $ 0.0001 September 30, 2022 $ 8,047 $ 402 July 1, 2022 $ 3,680 $ 184 December 31, 2021 $ 3,100 $ 155 September 30, 2021 $ 2,717 $ 136 July 1, 2021 $ 2,533 $ 127 December 31, 2020 $ 1,990 $ 100 Additional paid-in capital as of: September 30, 2022 $ 159,834,155 $ 159,841,800 July 1, 2022 $ 150,438,437 $ 150,441,933 December 31, 2021 $ 146,027,258 $ 146,030,203 September 30, 2021 $ 132,803,659 $ 132,806,240 July 1, 2021 $ 123,856,649 $ 123,859,055 December 31, 2020 $ 94,086,433 $ 94,088,323 Weighted average common stock outstanding: Three months ended September 30, 2022 77,676,935 3,883,847 Three months ended September 30, 2021 26,442,446 1,322,122 Nine months ended September 30, 2022 48,425,236 2,421,262 Nine months ended September 30, 2021 24,312,510 1,215,626 Prior to Split After Reverse Split Loss per share: Three months ended September 30, 2022 $ ( ) $ ( ) Three months ended September 30, 2021 $ ( ) $ ( ) Nine months ended September 30, 2022 $ ( ) $ ( ) Nine months ended September 30, 2021 $ ( ) $ ( ) Selected exercise and conversion prices: 2022 Common warrant $ 0.2300 $ 4.6000 2022 Underwriter warrant $ 0.2300 $ 4.6000 2022 Pre-funded warrant $ 0.0001 $ 0.0020 2019 Public and Private warrants $ 11.5000 $ 230.0000 Senior Convertible Notes conversion price $ 0.3105 $ 6.2100 Outstanding common stock equivalents (assuming exercise and vesting, as applicable, of the underlying instruments): 2019 Public warrants 5,813,804 290,690 2019 Private warrants 225,635 11,282 2022 Common warrants 43,478,261 2,173,913 2022 Underwriter warrants 2,173,913 108,696 Unvested restricted stock units 291,983 14,599 Unvested restricted stock awards 6,679 334 |
Significant Transactions
Significant Transactions | 9 Months Ended |
Sep. 30, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Significant Transactions | Note 3 – Significant Transactions Restructuring In May 2022, we implemented the Restructuring as approved by our board of directors. The Restructuring resulted in a reduction of the Company ’s 2021 Acquisitions V iridian Sciences On April 1, 2021, we completed the acquisition of Viridian, a cannabis business management software provider that is built on SAP Business One. We acquired Viridian in exchange for 50,000 365 On October 1, 2021, we acquired all the issued and outstanding shares of 365 “ ” Cannabis shares consisted of an initial purchase price of ( ) $ million ) $ million 180,000 ) contingent value rights to be issued pursuant to a rights indenture entitling the holders thereof to receive, subject to certain adjustments as set forth in the Stock Purchase Agreement, an aggregate of up to $ million Cannabis achieves certain revenue targets as specified in the Stock Purchase Agreement. These rights are accounted for as contingent consideration and were initially measured at a fair value of $6.3 million. Upon the completion of the assessment period associated with the revenue targets, the fair value of the contingent consideration was reduced to $3.3 million as of September 30, 2022 with a corresponding adjustment reflected in our loss from operations for the periods ended September 30, 2022. We reached a working capital settlement agreement during the first quarter of 2022 in the amount of $1.5 million. As a result of this post-close adjustment, the 365 Cannabis purchase price was reduced by $1.5 million. This was recorded as follows: (1) a receivable of $0.4 million was recorded in other current assets on our condensed consolidated balance sheet as of March 31 On May 23, 2022, we and the sellers of Cannabis entered into an amendment (the “Amendment”) to the Stock Purchase Agreement in order to provide the sellers an election to have the potential earn-out payment, recognized as contingent consideration in the table below, paid in cash or Common Stock or in any combination thereof. Under the Amendment, if a seller elects to have any portion of the earn-out payment paid in cash such amount payable will be reduced by %. The fair value of the consideration transferred as of the date of acquisition is reflected in the table below (in thousands): Shares issued $ 11,060 Cash 4,982 Contingent co nsidera (1) 6,300 Total fair value of consideration transferred $ 22,342 (1) The fair value of the acquisition date contingent consideration was reduced to $ million during the three months ended September 30, 2022. The presentation below reflects our final purchase price allocation, Cash $ 527 Accounts receivable 486 Prepaid expenses and other current asset 261 Fixed assets 93 Non-compete agreement 80 Acquired technology 1,040 Customer relationships 13,810 Acquired trade name 270 Goodwill 12,489 Accounts payable and accrued expenses (2,588 ) Deferred tax liabilities (826 ) Deferred revenue (3,300 ) Net assets acquired $ 22,342 The excess of purchase consideration over the 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. Pro Forma Financial Information The following unaudited pro forma consolidated operating results give effect to the Viridian and 365 Cannabis acquisitions, as if they had been completed as of January 1, 2021 (in thousands): Nine Months Ended September 30, 2021 Revenue $ 22,218,616 Net loss $ (15,472,157 ) Three Months Ended September 30, 2021 Revenue $ 7,520,320 Net loss $ (1,982,553 ) The pro forma financial information for the period presented above has been calculated after adjusting the results of Viridian and Cannabis 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 periods indicated above as well as direct acquisition costs. 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 years indicated above. |
Revenue and Contracts with Cust
Revenue and Contracts with Customers | 9 Months Ended |
Sep. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenue and Contracts with Customers | Note 4 – Revenue and Contracts with Customers We recognize revenue when a customer obtains the benefit of promised services, in an amount that reflects the consideration we expect to be entitled to receive in exchange for those services. In determining the amount of revenue to be recognized, we perform the following steps: (i) identification of the contract with a customer; (ii) identification of the promised services in the contract and determination of whether the promised services are performance obligations, including whether they are distinct in the context of the contract; (iii) determination of the transaction price; (iv) allocation of the transaction price to the performance obligations based on estimated selling prices; and (v) recognition of revenue when (or as) we satisfy each performance obligation. Software Revenue. 365 30 ’ 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 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, these revenues are recognized as services are rendered and accepted by the customer. Other Revenue. Our other revenue is derived primarily from point-of-sale hardware and other non-recurring revenue . We recognize revenue as these products are delivered and title has transferred. 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, implementation and consulting 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-month period is recorded as deferred revenue, which is presented as a current liability while amounts that will be recognized in periods greater than twelve months in the future are recognized as a noncurrent liability on the accompanying consolidated balance sheets. Disagg We derive the majority of our revenue from subscription fees paid for access to and usage of our “ ” Sales The following tables summarizes our revenue disaggregation of enterprise offerings and non-enterprise offerings for the following periods (in thousands): Nine Months Ended September 30, 2022 2021 Enterprise $ 8,478 $ 2,366 Non-enterprise 9,972 11,690 $ 18,450 $ 14,056 Nine Months Ended September 30, 2022 2021 United States $ 12,814 $ 10,272 Canada 5,636 3,784 $ 18,450 $ 14,056 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 ’ Transaction Price Allocated to Future Performance Obligation GAAP provides certain practical expedients that limit the required disclosure of the aggregate amount of transaction price that is allocated to performance obligations that have not yet been satisfied. As many of the contracts the Company has entered into with customers are for a twelve-month subscription term, a significant portion of performance obligations that have not yet been satisfied as of September 30, 2022 are part of a contract that has an original expected duration of year or less. For contracts with an original expected duration of greater than year, for which the practical expedient does not apply, the aggregate transaction price allocated to the unsatisfied performance obligations was $23.0 million $12.2 million 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 to three years. Deferred revenue is included in the accompanying consolidated balance sheets under current liabilities, net of any long-term portion that is included in noncurrent liabilities. T he following table summarizes deferred revenue activity for the nine months ended September 30, 2022 (in thousands): As of 2021 Net additions Revenue recognized As of September 30, 2022 Deferred revenue $ 4,126 11,793 (13,269 ) $ 2,650 O f the $ 18.4 million $3.8 million w Costs to Obtain Contracts We 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 a component of 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 to three years based on the estimated customer relationship period. The following table summarizes deferred contract cost activity for the nine months ended September 30, 2022 As of 2021 Additions Amortized costs As of Deferred contract costs $ 261 289 (276 ) $ 274 |
Goodwill and Intangible Assets,
Goodwill and Intangible Assets, Net | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets, net | Note 5 - Goodwill and Intangible Assets, net Impairments Based on our qualitative assessment of goodwill, we determined it was necessary to perform a quantitative valuation of goodwill as of March 31, 2022 and June 30, 2022. Unchanged from the year ended December 31, 2021, we determined there were two 3 Enterprise Reporting Unit During the six months ended June 30, 2022, due primarily to a continued decline in market valuation from December 31, 2021, we recorded an 50 Non-Enterprise Reporting Unit During the six months ended June 30, 2022, due primarily due to a continued decline in market valuation from December 31, 2021, we recorded impairment expenses of $23.5 million including impairments of $12.3 million and $11.2 million for each of the three months ended March 31, 2022 and June 30, 2022, respectively, related to our non-enterprise reporting unit. To perform our analysis, we applied a 25 75 We did not record any impairments during the three months ended September 30, 2022 as well as the three and nine months ended September 30, 2021. Finite-lived Intangible Assets, Net We performed a two impairments of $3.2 million attributable to certain intangible assets and capitalized software associated with one specific business line within the Non-Enterprise Reporting Unit. We did not record any impairments during the three months ended September 30, 2022 as well as the three and nine months ended September 30, 2021. |
Long Term Debt
Long Term Debt | 9 Months Ended |
Sep. 30, 2022 | |
Long-term Debt, Unclassified [Abstract] | |
Long Term Debt | Note 6 – Long Term Debt Long-term debt was comprised of the following as of the dates presented: September 30, 2022 December 31, 2021 Fair value of debt 14,475,000 17,305,000 Less: Current portion (9,900,000 ) (13,200,000 ) Noncurrent portion $ 4,575,000 $ 4,105,000 Senior Convertible Notes On October 5, 2021 , we entered into the SPA resulting in the issuance of the Senior Convertible Notes to two institutional investors in a private placement transaction. The Senior Convertible Notes were issued for an aggregate principal amount of $20.0 million for $18.0 million reflecting an original issue discount of 10 percent or $2.0 million. The net proceeds from the issuance of the Senior Convertible Notes were used to payoff and retire convertible notes that were issued in 2020 (the “2020 Notes”) and fund our growth initiatives through acquisitions and continued investment in our technology infrastructure. The Senior Convertible Notes rank senior to all of our other and future indebtedness. The Senior Convertible Notes mature on October 4, 2024 and can be repaid in shares of Common Stock or cash. The Senior Convertible Notes are convertible into shares of Common Stock of Akerna at a conversion price of $4.75 per share effective October 4, 2022 which represents an adjustment, as required by the SPA, from $6.21 per share as a result of the offering of convertible preferred stock on that date (see Note 10). The Senior Convertible Notes are to be repaid in monthly installments, which was deferred to January 1, 2023 in connection with the Convertible Notes Amendment (see below). In connection with the SPA and the Senior Convertible Notes, we and certain of our subsidiaries entered into an amended Security and Pledge Agreement (the “Security Agreement”) with the lead investor, in its capacity as collateral agent (in such capacity, the “Collateral Agent”) for all holders of the Senior Convertible Notes. The Security Agreement creates a first priority security interest in all of the personal property of the Company and certain of its subsidiaries of every kind and description, tangible or intangible, whether currently owned and existing or created or acquired in the future (the “Collateral”). 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 Senior Convertible Notes pursuant to its terms. An “Event of Default” under the Security Agreement means (i) any defined event of default under any one or more of the transaction documents (including the Senior Convertible Notes), in each instance, after giving effect to any notice, grace, or cure periods provided for in the applicable document, (ii) the failure by us to pay any amounts when due under the Senior Convertible Notes or any other transaction document, or (iii) the breach of any representation, warranty or covenant by the Company under the Security Agreement. In connection with the occurrence of an event of default, the holders of the Senior Convertible Notes will be entitled to convert all or any portion of the Senior 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 (“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 Common Stock for each of the two trading days with the lowest VWAP of the Common Stock during the ten 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 $ 10.80 On June 30, 2022, we and the holders Senior Convertible Notes entered into the Convertible Notes Amendment and added covenants such that (a) we are subject to a daily cash test of having an available cash balance of at least $7.0 million, which amount shall be reduced by $1.0 million on each of the dates at which the aggregate principal due upon the Senior Convertible Notes is equal to or less than $14.0 million and $11.0 million, subject in all cases to a minimum of $5.0 million, and (b) we established and maintain bank accounts for each holder for an aggregate amount of $7.0 million with such amount to be released from the accounts only upon the written consent of such holder, provided that $1.0 million will automatically release from the accounts upon the occurrence of each of the dates at which the aggregate principal due upon the Senior Convertible Notes is equal to or less than $14.0 million and $11.0 million, subject to certain conditions. Further the holders of the Senior Convertible Notes waived provisions such that (i) no amortization payments are due and payable for any payments previously required to be made from July 1, 2022 through January 1, 2023, (ii) the holders of the Senior Convertible Notes will not accelerate any previously deferred installment amounts until January 1, 2023 and (iii) the terms of the SPA which would provide for reset of the conversion price of the Senior Convertible Notes as a result of the issuance of securities under the 2022 Unit Offering (see Note 10) and instead agree to a reset of the conversion price equal to a per share price of 135% of the 2022 Unit Offering price, or $6.21 per unit, which was subsequently reduced to $4.75 per share on October 4, 2022 as described above. On September 27, 2022, the holders of the Senior Convertible Notes granted a waiver of the Required Reserve Amount under the Senior Convertible Notes and SPA for a period retroactive from August 30, 2022 until November 30, 2022 conditioned on the Company pursuing the Reverse Stock Split by no later than November 30, 2022, to cure the deficiency. 2020 Notes We issued 2020 Notes with a principal amount of $ 17.0 15.0 on June 9, 2020. The 2020 October 5, 2021 Method of Accounting and Activity During the Periods Upon the dates that they were issued, we made irrevocable elections to apply the fair value option to account for each of the Senior Convertible Notes and the 2020 Notes. Disclosures, including the assumptions used to determine the fair values of these debt instruments, are provided in Note 11. During the nine months ended September 30, 2022, we made $5.4 million in principal payments on the Senior Convertible Notes, of which $1.4 million was settled in cash and the remaining $3.9 million was settled in Common Stock. During the nine months ended September 30, 2022, the fair value of the Senior Convertible Notes increased by $2.5 million. Of the adjustment, a decrease of $0.3 million resulted from instrument-specific credit risk and was recognized as other comprehensive income and accumulated in equity and an increase of $2.8 million was recognized in our consolidated statement of operations as a change in fair value of convertible notes. As of September 30, 2022, the fair value of the Senior Convertible Notes on our consolidated balance sheet was $14.5 million. During the nine months ended September 30, 2021, we made $11.6 million in principal payments on the 2020 Notes, of which $1.2 million was settled in cash and the remaining $10.4 million was settled in Common Stock. During the nine months ended September 30, 2021, the fair value of the 2020 Notes increased by $2.0 million. Of the adjustment, an increase of less than $0.1 million resulted from instrument-specific credit risk and was recognized as other comprehensive income and accumulated in equity and an increase of $2.0 million was recognized in our consolidated statement of operations as a change in fair value of convertible notes. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 7 - Income Taxes Our effective tax rate was % and % , respectively. Differences between the statutory rate and our effective tax rate resulted from changes in valuation allowance and permanent differences for tax purposes in the treatment of certain nondeductible expenses. Our effective tax rate is impacted by indefinite-lived deferred tax liabilities, resulting primarily from the acquisition of Cannabis, which cannot be considered as a source of future taxable income available to utilize recorded deferred tax assets based on the Company ’ 80% limit on the utilization of net operating loss carry forwards under current US tax law. Uncertain tax positions related to penalties of less than $ million have been reversed for the three months ended September 30, 2022 as a result of the Internal Revenue Service ’ , net of refunds received, |
Supplemental Balance Sheet Disc
Supplemental Balance Sheet Disclosures | 9 Months Ended |
Sep. 30, 2022 | |
Balance Sheet Related Disclosures [Abstract] | |
Supplemental Balance Sheet Disclosures | Note 8 - Supplemental Balance Sheet Disclosures Prepaid expenses and other current assets consisted of the following: As of As of September 30, December 31, 2022 2021 Software and technology $ 399,824 $ 687,740 Professional services, dues and subscriptions 297,106 546,126 Insurance 215,762 264,097 Deferred contract costs 273,521 260,899 Unbilled receivables 841,453 506,984 Other 302,366 117,918 Total prepaid expenses and other current assets $ 2,330,032 $ 2,383,764 Accounts payable, accrued expenses, and other accrued liabilities consisted of the following As of As of September 30, December 31, 2022 2021 Accounts payable $ 1,270,695 $ 1,943,457 Professional fees 234,750 319,590 Sales taxes 515,789 360,361 Compensation 517,359 1,123,467 Contractors 556,766 1,288,730 Settlements and legal 1,084,294 681,045 Other 451,028 346,870 Total accounts payable, accrued expenses, and other accrued liabilities $ 4,630,681 $ 6,063,520 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 9 - Commitments and Contingencies Litigation On December 4, 2020, TechMagic USA LLC ( “ ” “ ” ’ ’s ’ 30, 2022 On April 2, 2021, TreCom Systems Group, Inc. (“TreCom”) filed suit against Akerna and our wholly-owned subsidiary, MJ Freeway, LLC, in federal District Court for the Eastern District of Pennsylvania, seeking recovery of up to approximately $ 2.0 million allegedly provided pursuant to a Subcontractor Agreement between MJ Freeway and TreCom. MJ Freeway provided a notice of termination of the operative Subcontractor Agreement on August 4, 2020. MJ Freeway disputes the validity of TreCom’s invoices and the enforceability of the alleged agreement that TreCom submitted to the court. Akerna filed counterclaims against TreCom for breach of contract, a declaratory judgment, commercial disparagement, and defamation. TreCom failed to return Akerna’s intellectual property and issued numerous disparaging statements to one of Akerna’s clients. TreCom subsequently filed a motion to dismiss these counterclaims, which was denied by the court. Akerna intends to vigorously defend against TreCom’s claims, and pursue its own claims As of December 31, 2021 and September 30, 2022, we recognized a loss contingency of $0.2 From time to time, we may be involved in litigation relating to claims arising out of our operations in the normal course of business. We 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 loss 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 September 30, 2022, and through the date these consolidated financial statements were issued, there were no other legal proceedings requiring recognition or disclosure in the consolidated financial statements. Operating Leases During the first half of 2022, we began negotiations to terminate the 365 Cannabis office lease in Las Vegas, Nevada. We recorded an obligation and lease termination expense of $0.5 million |
Equity
Equity | 9 Months Ended |
Sep. 30, 2022 | |
Equity [Abstract] | |
Equity | Note 10 – Equity Convertible Redeemable Preferred Stock On October 4, 2022, we completed an offering 400,000 of shares of the Company’s Series A Convertible Redeemable Preferred Stock, par value $ 0.0001 On November 7, 2022, we held a special meeting of stockholders to consider an amendment (the “Amendment”) to our Amended and Restated Certificate of Incorporation (the “Charter”), to effect a reverse stock split of the outstanding shares of Common Stock by a ratio of 20 for 1 as determined by our Board of Directors. The holders of the Convertible Redeemable Preferred Stock agreed to not transfer, offer, sell, contract to sell, hypothecate, pledge or otherwise dispose of the shares of the Convertible Redeemable Preferred Stock until the Reverse Stock Split, voted the shares of the Series A Preferred Stock purchased in the offering in favor of the Amendment and voted the shares of the Series B Preferred Stock purchased in the offering in a manner that “mirrored” the proportions on which the shares of Common Stock (excluding any shares of Common Stock that did not vote), the Company’s special voting share (excluding any proportion of the special voting share that did not vote) and Series A Preferred Stock voted on the Reverse Stock Split. The Reverse Stock Split required the approval of the majority of the issued and outstanding shares entitled to vote on the matter. Because the Series B Preferred Stock was automatically and without further action of the holder voted in a manner that “mirrored” the proportions on which the shares of Common Stock (excluding any shares of Common Stock that were not voted), the Company’s special voting share (excluding any proportion of the special voting share that was not voted) and Series A Preferred Stock voted on the Reverse Stock Split, abstentions by common stockholders did not have any effect on the votes cast by the holders of the Series B Preferred Stock. The Amendment was approved on November 7, 2022 and the Reverse Stock Split was effectuated at 12:01 a.m. Eastern Standard Time on November 8, 2022 (see Note 2 for the effects of the retroactive application of the effects for all of the periods presented herein). The holders of all of the Convertible Redeemable Preferred Stock redeemed their shares for cash at 105% of the stated value, or $10.50 per share, of such shares on November 9, 2022. Accordingly, we directed the escrow agent to pay $5.25 million on November 10, 2022 to the holders from the escrow account established upon the date of the Convertible Redeemable Preferred Stock offering. Special Voting Preferred Stock and Exchangeable Shares In connection with a prior transaction in which we acquired Ample in exchange for 3,294,580 million shares of exchangeable shares (the “Exchangeable Shares”), we issued of a single share of our special voting preferred stock (the “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 that each Exchangeable Share is exchangeable on a 20 one The Exchangeable Shares do not have a par value. The Special Voting Preferred stock has a par value of $ 0.0001 $ 1.00 During the , several Ample shareholders exchanged a total of 18,094 xchangeable Shares with a value of $ 138,419 for 904 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 , there were a total of 291,192 exchangeable shares remaining as issued and outstanding which could be exchanged for 14,560 shares of Akerna Common Stock. ATM Program In 2021, we entered into an Equity Distribution Agreement with Oppenheimer & Co. Inc. (“Oppenheimer”) and A.G.P./Alliance Global Partners (“AGP”) pursuant to which we could offer and sell from time to time, up to $ 25 118,629 shares of Common Stock with an aggregate gross purchase price of $2.7 million, including 90,809 shares with an aggregate gross purchase price of $0.8 million sold during 2022, were sold under the 2021 ATM Program. On September 23, 2022, we, Oppenheimer and AGP mutually agreed to terminate the 2021 ATM Program. On September 28, 2022, we entered into a new agreement with AGP pursuant to which we may offer and sell up to $ 20.0 including working capital, marketing, product development and capital expenditures. Through November 10, 2022, we sold a total of 402,345 shares of Common Stock with an aggregate gross purchase price of $0.9 million under the 2022 ATM Program. 2022 Unit Offering On July 5, 2022, we completed the 2022 Unit Offering which was comprised of an aggregate of (i) 29,382,861 units consisting of 1,469,143 shares of Common Stock together with Common Stock warrants (the “Common Warrants”) to purchase up to 1,469,143 shares of Common Stock (together, the “Units”) and (ii) 14,095,400 pre-funded units, consisting of 14,095,400 pre-funded warrants (“Pre-funded Warrants”) to purchase 704,770 shares of Common Stock, together with Common Warrants to purchase up to 704,770 shares of Common Stock (together, the “Pre-funded Units”). The Units were sold at a public offering price of $0.23 per unit and the Pre-funded Units were sold at a public offering price of $0.2299 per pre-funded unit. The Pre-Funded Warrants were exercised immediately thereafter at their nominal exercise price of $ 0.002 The Common Warrants accompanying each of the Units and Pre-funded Units were issued separately and are immediately tradeable separately upon issuance. 4.60 five We granted the Underwriter a 45-day option from the effective date of the 2022 Unit Offering to purchase from us (i) additional shares of Common Stock and/or (ii) Common Warrants and/or (iii) Pre-Funded Warrants, in any combination thereof solely to cover over-allotments(the “Over-allotment Option”); however, the Over-allotment Option expired unexercised on August 14, 2022. In addition, we issued to the Underwriter warrants to purchase additional shares of Common Stock (the “Underwriter Warrants”). Upon the expiration of the Over-allotment Option, the Underwriter Warrants provided for the purchase of 108,696 shares of Common Stock . The Underwriter Warrants are exercisable at any time and from time to time, in whole or in part, commencing from six months after June 29, 2022 five years from the Effective Date, at a price per share equal to $ 4.60 . In connection with the Convertible Redeemable Preferred Stock offering, the exercise price of the Underwriter Warrants was reduced to $3.518 per share effective October 5, 2022. The Unit Offering closed on July 5, 2022 and we received 9.2 7.0 ’ ’ , both at their par value of $0.0001 per share including legal and other professional fees 2019 Warrants In connection with MTech Acquisition Corp. ’s “ ” 287,500 units at a purchase price of $ 200.00 37,500 one one one 230.00 12,187 200.00 one one one 230.00 Upon completion of the mergers between MTech and MJF on June 17, 2019, as contemplated by the Merger Agreement dated October 10, 2018, as amended (“Mergers”), the MTech Public Warrants and the MTech Private Warrants were converted, respectively, at an exchange ratio of one one one 9,468 Outstanding Warrants The following table summarizes our warrants outstanding as of the dates presented: Exercise Price Expiration Date Balance as of December 31, 2021 Issued Exercised Expired Balance as of September 30, 2022 2019 Public Warrants (1) $ 230.00 6/19/2024 5,813,800 — — — 5,813,800 2022 Unit Offering Pre-funded Warrants (2) $ 0.002 6/29/2027 — 14,095,400 ) — - Common Warrants (3) $ 4.60 6/29/2027 — 43,478,261 — — 43,478,261 Underwriter Warrants (3) $ 4.60 6/29/2027 — 2,173,913 — — 2,173,913 5,813,800 59,747,574 (14,095,400 ) — 51,465,974 (1) The 2019 Public Warrants are exercisable for shares of Common Stock at $ 230.00 warrants for share of Common Stock. (2) A total of Pre-funded Warrants were issued and exercised in exchange for shares of Common Stock. (3) The Common Warrants and Underwriter Warrants are exercisable for a combined amount of shares of Common Stock at $ per share or a ratio of warrants for share of Common Stock. |
Fair Value
Fair Value | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value | Note 11 - Fair Value Fair Value Option Election – Convertible Notes We elected to account for both the Senior Convertible Notes and the For the Senior Convertible Notes and the 3 and six months ended September 30, 2022 and September 30, 2021: Three Months Ended September 30, 2022 2021 Fair value balance at beginning of period $ 13,388,000 $ 6,152,000 Payments of principal — (2,344,226 ) Change in fair value reported in the statements of operations 1,113,000 23,227 Change in fair value reported in other comprehensive loss (26,000 ) 3,000 Fair value balance at end of period $ 14,475,000 $ 3,834,001 Nine Months Ended September 30, 2022 2021 Fair value balance at beginning of period $ 17,305,000 $ 13,398,000 Payments of principal (5,380,000 ) (11,613,903 ) Change in fair value reported in the statements of operations 2,840,000 2,030,904 Change in fair value reported in other comprehensive loss (290,000 ) 19,000 Fair value balance at end of period $ 14,475,000 $ 3,834,001 The estimated fair values of the Senior Convertible Notes and 2020 Notes were computed using Monte Carlo 3 “ ” We estimated the fair value by using the following key inputs to the Monte Carlo Simulation Models : Fair Value Assumptions - Convertible Notes September 30, 2022 December 31, 2021 Face value principal payable $ 14,660,000 $ 20,000,000 Original conversion price $ 6.2100 $ 81.00 Value of Common Stock $ 1.80 $ 35.00 Expected term (years) 2.0 2.8 Volatility 92 % 75 % Market yield 45.3 % 37.1 % Risk free rate 4.2 % 1 % Issue date October 5, 2021 October 5, 2021 Maturity date October 5, 2024 October 5, 2024 ( 1 In accordance with the Convertible Notes Amendment, the conversion price was lowered to $ per share from $ per share through October 4, 2022 (see Note 10 ). Fair Value Measurement – Private Warrants For the Private Warrants classified as derivative liabilities, which are measured at fair value categorized within Level 3 of the fair value hierarchy, the following represents a reconciliation of the fair values for the three months ended September 30, 2022 and September 30, 2021: Three Months Ended September 30, 2022 2021 Fair value balance at beginning of period $ 11,282 $ 354,247 Change in fair value reported in the statements of operations (2,257 ) (194,046 ) Fair value balance at end of period $ 9,025 $ 160,201 Nine Months Ended September 30, 2022 2021 Fair value balance at beginning of period $ 63,178 $ 311,376 Change in fair value reported in the statements of operations (54,153 ) (151,175 ) Fair value balance at end of period $ 9,025 $ 160,201 We utilized a binomial lattice model, which incorporates significant inputs, specifically the expected volatility, 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 Private Warrants reflect our estimates regarding the assumptions that market participants would use in valuing the Warrants as of the end of the reporting periods. We record the fair value of the Private Private Private Private Private We estimated the fair value by using the following key inputs: Fair Value Assumptions - Private September 30, 2022 December 31, 2021 Number of Private Warrants 225,635 225,635 Original conversion price $ 230.00 $ 230.00 Value of Common Stock $ 1.80 $ 35.00 Expected term (years) 1.71 2.46 Volatility 87.6 % 85.8 % Risk free rate 4.1 % 0.8 % Fair Value Measurement – 2022 Unit Offering Common and Underwriter Warrants The fair value of the Common Warrants and Underwriter Warrants issued in connection with the 2022 Unit Offering represent a measurement within Level 3 of the fair value hierarchy and were estimated based on the following key inputs as of the date of the 2022 Unit Offering: Fair Value Assumptions - 2022 Co mmon and Und July 5, 2022 Exercise price $ 4.60 Expected term (years) 5.0 Volatility 136.9 % We utilized a Black-Scholes-Merton option pricing model, which incorporates significant inputs, specifically the expected volatility, that are not observable in the market, and thus represents a Level 3 |
Earning per share
Earning per share | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Loss Per Share | Note 12 - Earning per Share During the three and nine months ended September 30, 2022 ’s Diluted net loss per common share is calculated under the -class method by giving effect to all potentially dilutive common stock equivalents, including warrants, restricted stock, restricted stock units, and shares of common stock issuable upon conversion of our Senior Convertible Notes for periods in 2022 and 2020 Notes for periods in 2021. We analyzed the potential dilutive effect of any outstanding convertible securities under the “ ” -class or if-converted ) The dilutive effect of unvested restricted stock and restricted stock units is reflected in diluted loss per share by application of the treasury stock method and is excluded when the effect would be anti-dilutive. 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 that were not included in the calculation of diluted earnings per share: As of 2022 2021 Shares issuable upon exchange of Exchangeable Shares 14,560 19,297 Shares of common stock issuable upon conversion of convertible notes ( ) — 63,921 Warrants 2019 Public Warrants 290,690 290,690 2022 Unit Offering - Common Warrants 2,173,913 — 2022 Unit Offering - Underwriter Warrants 108,696 — Unvested restricted stock units 14,599 42,993 Unvested restricted stock awards 334 1,620 Total 2,602,792 418,521 (1) Amounts for shares of common stock issuable upon conversion of convertible notes were excluded for the 2022 period due to the waiver of the Required Reserve Amount (see Note 6). |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and with the instructions to the Quarterly Report on Form 10-Q and Article 8 of Regulation S-X for interim financial information. Accordingly, these financial statements do not include all of the information normally required by GAAP or Securities and Exchange Commission rules and regulations for complete financial statements. September 30, 2022 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2022. The condensed consolidated balance sheet as of December 31, 2021, has been derived from our audited financial statements at that date but does not include all disclosures and financial information required by GAAP for complete financial statements. The information included in this quarterly report on Form 10-Q should be read in conjunction with our consolidated financial statements and notes thereto for the period ended December 31, 2021, which were included in our report on Form 10-K filed on March 31 |
Principles of Consolidation | Principles of Consolidation Our accompanying consolidated financial statements include the accounts of Akerna and our wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. |
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 consolidated financial statements and accompanying notes thereto. Our most significant estimates and assumptions are related to the valuation of acquisition-related assets and liabilities, capitalization of internal costs associated with software development, fair value measurements, impairment assessments, loss contingencies, valuation allowance associated with deferred tax assets, stock based compensation expense, and useful lives of long-lived intangible assets. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Accordingly, actual results could differ from those estimates. |
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 $0.9 million $0.3 million December 31, 2021, respectively |
Concentrations of Credit Risk | Concentrations of Credit Risk We grant credit in the normal course of business to customers in the United States and Canada. We periodically perform credit analysis and monitor the financial condition of our customers to reduce credit risk. During the nine months ended September 30, 2022 two % and 11% As of September 30, 2022, |
Warrants | Warrants We evaluate warrants that we may issue from time to time under a two-step process provided in GAAP. The first step is intended to distinguish liabilities from equity. Warrants that could require cash settlement are generally classified as liabilities. For warrants that are considered outside of the scope of liability classification, a second step evaluates warrants as either a derivative subject to derivative accounting and disclosures or as equity instruments based upon the specific terms of the underlying warrant agreement and certain other factors associated with the our capital structure. Warrants that are indexed to the Company ’ |
Segment Reporting | Segment Reporting We operate our business as one operating segment. Operating segments are defined as components of an enterprise about which separate financial information is evaluated regularly by the chief operating decision maker ( “ ” In the following table, we disclose the combined gross balance of our fixed assets, capitalized software, and intangible assets by geographical location (in thousands): As of September 30, 2022 As of December 31, 2021 Long-lived assets: United States $ 28,234 $ 32,356 Canada 6,102 5,229 Total $ 34,336 $ 37,585 |
Adoption of Recent Accounting Pronouncements | Adoption of Recent Accounting Pronouncements The FASB issued ASU No. 2016-02, Leases “ ” Leases “ ” The FASB issued ASU No. 2020-01, Clarifying the Interaction between Topic 321, Topic 323, and Topic 815 “ ” The FASB issued ASU No. 2021-04, Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options “ ” We adopted ASU 2021-04 effective January 1, 2022 and there was no material impact to our balance sheets and statements of operations. Recent Accounting Pronouncements Pending Adoption The FASB issued ASU No. 2016-13, Measurement of Credit Losses on Financial Instruments “ ” The FABS issued ASU No. 2020-06, Accounting for Convertible Instruments and Contracts in an Entity ’ “ ” ’ The FASB issued ASU No. 2021-08, Accounting for Contract Assets and Contract Liabilities from Contracts with Customers “ ” liabili Revenue from Contracts with Customers We are currently evaluating the impact this guidance will have on our consolidated financial statements. |
Subsequent Events | Subsequent Events Management has evaluated all of our activities through the issuance date of our condensed consolidated financial statements and has concluded that, with the exception of (i) the issuance of preferred stock in an offering that closed on October 4, 2022 and their subsequent redemption on November 9, 2022, (ii) the approval by our shareholders of t he Reverse Stock Split 402,345 The effectuation of the Reverse Stock Split has been applied retrospectively to all periods presented throughout these financial statements. Accordingly, all disclosures of shares of Common Stock, restricted stock awards and restricted stock units herein and any corresponding reference to market, conversion and exercise prices have been adjusted. The following table summarizes the relevant disclosures prior to and after the Reverse Stock Split: Prior to Reverse Split After Reverse Reverse Split Common stock outstanding as of: September 30, 2022 80,465,890 4,023,294 July 1, 2022 36,826,733 1,841,336 December 31, 2021 31,001,884 1,550,094 September 30, 2021 27,167,917 1,358,395 July 1, 2021 25,332,439 1,266,621 December 31, 2020 19,901,248 995,062 Common stock, par value $ 0.0001 September 30, 2022 $ 8,047 $ 402 July 1, 2022 $ 3,680 $ 184 December 31, 2021 $ 3,100 $ 155 September 30, 2021 $ 2,717 $ 136 July 1, 2021 $ 2,533 $ 127 December 31, 2020 $ 1,990 $ 100 Additional paid-in capital as of: September 30, 2022 $ 159,834,155 $ 159,841,800 July 1, 2022 $ 150,438,437 $ 150,441,933 December 31, 2021 $ 146,027,258 $ 146,030,203 September 30, 2021 $ 132,803,659 $ 132,806,240 July 1, 2021 $ 123,856,649 $ 123,859,055 December 31, 2020 $ 94,086,433 $ 94,088,323 Weighted average common stock outstanding: Three months ended September 30, 2022 77,676,935 3,883,847 Three months ended September 30, 2021 26,442,446 1,322,122 Nine months ended September 30, 2022 48,425,236 2,421,262 Nine months ended September 30, 2021 24,312,510 1,215,626 Prior to Split After Reverse Split Loss per share: Three months ended September 30, 2022 $ ( ) $ ( ) Three months ended September 30, 2021 $ ( ) $ ( ) Nine months ended September 30, 2022 $ ( ) $ ( ) Nine months ended September 30, 2021 $ ( ) $ ( ) Selected exercise and conversion prices: 2022 Common warrant $ 0.2300 $ 4.6000 2022 Underwriter warrant $ 0.2300 $ 4.6000 2022 Pre-funded warrant $ 0.0001 $ 0.0020 2019 Public and Private warrants $ 11.5000 $ 230.0000 Senior Convertible Notes conversion price $ 0.3105 $ 6.2100 Outstanding common stock equivalents (assuming exercise and vesting, as applicable, of the underlying instruments): 2019 Public warrants 5,813,804 290,690 2019 Private warrants 225,635 11,282 2022 Common warrants 43,478,261 2,173,913 2022 Underwriter warrants 2,173,913 108,696 Unvested restricted stock units 291,983 14,599 Unvested restricted stock awards 6,679 334 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Schedule of disaggregated by primary geographical markets and revenue | As of September 30, 2022 As of December 31, 2021 Long-lived assets: United States $ 28,234 $ 32,356 Canada 6,102 5,229 Total $ 34,336 $ 37,585 |
Schedule of reverse stock split | Prior to Reverse Split After Reverse Reverse Split Common stock outstanding as of: September 30, 2022 80,465,890 4,023,294 July 1, 2022 36,826,733 1,841,336 December 31, 2021 31,001,884 1,550,094 September 30, 2021 27,167,917 1,358,395 July 1, 2021 25,332,439 1,266,621 December 31, 2020 19,901,248 995,062 Common stock, par value $ 0.0001 September 30, 2022 $ 8,047 $ 402 July 1, 2022 $ 3,680 $ 184 December 31, 2021 $ 3,100 $ 155 September 30, 2021 $ 2,717 $ 136 July 1, 2021 $ 2,533 $ 127 December 31, 2020 $ 1,990 $ 100 Additional paid-in capital as of: September 30, 2022 $ 159,834,155 $ 159,841,800 July 1, 2022 $ 150,438,437 $ 150,441,933 December 31, 2021 $ 146,027,258 $ 146,030,203 September 30, 2021 $ 132,803,659 $ 132,806,240 July 1, 2021 $ 123,856,649 $ 123,859,055 December 31, 2020 $ 94,086,433 $ 94,088,323 Weighted average common stock outstanding: Three months ended September 30, 2022 77,676,935 3,883,847 Three months ended September 30, 2021 26,442,446 1,322,122 Nine months ended September 30, 2022 48,425,236 2,421,262 Nine months ended September 30, 2021 24,312,510 1,215,626 Prior to Split After Reverse Split Loss per share: Three months ended September 30, 2022 $ ( ) $ ( ) Three months ended September 30, 2021 $ ( ) $ ( ) Nine months ended September 30, 2022 $ ( ) $ ( ) Nine months ended September 30, 2021 $ ( ) $ ( ) Selected exercise and conversion prices: 2022 Common warrant $ 0.2300 $ 4.6000 2022 Underwriter warrant $ 0.2300 $ 4.6000 2022 Pre-funded warrant $ 0.0001 $ 0.0020 2019 Public and Private warrants $ 11.5000 $ 230.0000 Senior Convertible Notes conversion price $ 0.3105 $ 6.2100 Outstanding common stock equivalents (assuming exercise and vesting, as applicable, of the underlying instruments): 2019 Public warrants 5,813,804 290,690 2019 Private warrants 225,635 11,282 2022 Common warrants 43,478,261 2,173,913 2022 Underwriter warrants 2,173,913 108,696 Unvested restricted stock units 291,983 14,599 Unvested restricted stock awards 6,679 334 |
Significant Transactions (Table
Significant Transactions (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Business Acquisition [Line Items] | |
Schedule of financial information combined results of operations | Nine Months Ended September 30, 2021 Revenue $ 22,218,616 Net loss $ (15,472,157 ) Three Months Ended September 30, 2021 Revenue $ 7,520,320 Net loss $ (1,982,553 ) |
365 Cannabis [Member] | |
Business Acquisition [Line Items] | |
Schedule of estimated acquisition date fair value of consideration | Shares issued $ 11,060 Cash 4,982 Contingent co nsidera (1) 6,300 Total fair value of consideration transferred $ 22,342 (1) The fair value of the acquisition date contingent consideration was reduced to $ million during the three months ended September 30, 2022. |
Schedule of preliminary estimated fair values of assets acquired and liabilities | Cash $ 527 Accounts receivable 486 Prepaid expenses and other current asset 261 Fixed assets 93 Non-compete agreement 80 Acquired technology 1,040 Customer relationships 13,810 Acquired trade name 270 Goodwill 12,489 Accounts payable and accrued expenses (2,588 ) Deferred tax liabilities (826 ) Deferred revenue (3,300 ) Net assets acquired $ 22,342 |
Revenue and Contracts with Cu_2
Revenue and Contracts with Customers (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Summarizes revenue disaggregation | Nine Months Ended September 30, 2022 2021 Enterprise $ 8,478 $ 2,366 Non-enterprise 9,972 11,690 $ 18,450 $ 14,056 Nine Months Ended September 30, 2022 2021 United States $ 12,814 $ 10,272 Canada 5,636 3,784 $ 18,450 $ 14,056 |
Summarizes deferred revenue activity | As of 2021 Net additions Revenue recognized As of September 30, 2022 Deferred revenue $ 4,126 11,793 (13,269 ) $ 2,650 |
Summarizes deferred contract cost activity | As of 2021 Additions Amortized costs As of Deferred contract costs $ 261 289 (276 ) $ 274 |
Long Term Debt (Tables)
Long Term Debt (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Debt Instruments [Abstract] | |
Schedule of long-term debt | September 30, 2022 December 31, 2021 Fair value of debt 14,475,000 17,305,000 Less: Current portion (9,900,000 ) (13,200,000 ) Noncurrent portion $ 4,575,000 $ 4,105,000 |
Supplemental Balance Sheet Di_2
Supplemental Balance Sheet Disclosures (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Balance Sheet Related Disclosures [Abstract] | |
Schedule of prepaid expenses and other current assets | As of As of September 30, December 31, 2022 2021 Software and technology $ 399,824 $ 687,740 Professional services, dues and subscriptions 297,106 546,126 Insurance 215,762 264,097 Deferred contract costs 273,521 260,899 Unbilled receivables 841,453 506,984 Other 302,366 117,918 Total prepaid expenses and other current assets $ 2,330,032 $ 2,383,764 |
Schedule of accounts payable, accrued expenses, and other current liabilities | As of As of September 30, December 31, 2022 2021 Accounts payable $ 1,270,695 $ 1,943,457 Professional fees 234,750 319,590 Sales taxes 515,789 360,361 Compensation 517,359 1,123,467 Contractors 556,766 1,288,730 Settlements and legal 1,084,294 681,045 Other 451,028 346,870 Total accounts payable, accrued expenses, and other accrued liabilities $ 4,630,681 $ 6,063,520 |
Equity (Tables)
Equity (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Equity [Abstract] | |
Schedule of share based compensation stock warrant activity | Exercise Price Expiration Date Balance as of December 31, 2021 Issued Exercised Expired Balance as of September 30, 2022 2019 Public Warrants (1) $ 230.00 6/19/2024 5,813,800 — — — 5,813,800 2022 Unit Offering Pre-funded Warrants (2) $ 0.002 6/29/2027 — 14,095,400 ) — - Common Warrants (3) $ 4.60 6/29/2027 — 43,478,261 — — 43,478,261 Underwriter Warrants (3) $ 4.60 6/29/2027 — 2,173,913 — — 2,173,913 5,813,800 59,747,574 (14,095,400 ) — 51,465,974 (1) The 2019 Public Warrants are exercisable for shares of Common Stock at $ 230.00 warrants for share of Common Stock. (2) A total of Pre-funded Warrants were issued and exercised in exchange for shares of Common Stock. (3) The Common Warrants and Underwriter Warrants are exercisable for a combined amount of shares of Common Stock at $ per share or a ratio of warrants for share of Common Stock. |
Fair Value (Tables)
Fair Value (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Schedule of fair value measurement unit offering common and underwriter warrants | Fair Value Assumptions - 2022 Co mmon and Und July 5, 2022 Exercise price $ 4.60 Expected term (years) 5.0 Volatility 136.9 % |
Convertible Debt [Member] | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Schedule of reconciliation of fair values | Three Months Ended September 30, 2022 2021 Fair value balance at beginning of period $ 13,388,000 $ 6,152,000 Payments of principal — (2,344,226 ) Change in fair value reported in the statements of operations 1,113,000 23,227 Change in fair value reported in other comprehensive loss (26,000 ) 3,000 Fair value balance at end of period $ 14,475,000 $ 3,834,001 Nine Months Ended September 30, 2022 2021 Fair value balance at beginning of period $ 17,305,000 $ 13,398,000 Payments of principal (5,380,000 ) (11,613,903 ) Change in fair value reported in the statements of operations 2,840,000 2,030,904 Change in fair value reported in other comprehensive loss (290,000 ) 19,000 Fair value balance at end of period $ 14,475,000 $ 3,834,001 |
Schedule of fair value by using key inputs | Fair Value Assumptions - Convertible Notes September 30, 2022 December 31, 2021 Face value principal payable $ 14,660,000 $ 20,000,000 Original conversion price $ 6.2100 $ 81.00 Value of Common Stock $ 1.80 $ 35.00 Expected term (years) 2.0 2.8 Volatility 92 % 75 % Market yield 45.3 % 37.1 % Risk free rate 4.2 % 1 % Issue date October 5, 2021 October 5, 2021 Maturity date October 5, 2024 October 5, 2024 ( 1 In accordance with the Convertible Notes Amendment, the conversion price was lowered to $ per share from $ per share through October 4, 2022 (see Note 10 ). |
Private Warrant [Member] | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Schedule of reconciliation of fair values | Three Months Ended September 30, 2022 2021 Fair value balance at beginning of period $ 11,282 $ 354,247 Change in fair value reported in the statements of operations (2,257 ) (194,046 ) Fair value balance at end of period $ 9,025 $ 160,201 Nine Months Ended September 30, 2022 2021 Fair value balance at beginning of period $ 63,178 $ 311,376 Change in fair value reported in the statements of operations (54,153 ) (151,175 ) Fair value balance at end of period $ 9,025 $ 160,201 |
Schedule of fair value by using key inputs | Fair Value Assumptions - Private September 30, 2022 December 31, 2021 Number of Private Warrants 225,635 225,635 Original conversion price $ 230.00 $ 230.00 Value of Common Stock $ 1.80 $ 35.00 Expected term (years) 1.71 2.46 Volatility 87.6 % 85.8 % Risk free rate 4.1 % 0.8 % |
Earning per Shares (Tables)
Earning per Shares (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of diluted earnings per share | As of 2022 2021 Shares issuable upon exchange of Exchangeable Shares 14,560 19,297 Shares of common stock issuable upon conversion of convertible notes ( ) — 63,921 Warrants 2019 Public Warrants 290,690 290,690 2022 Unit Offering - Common Warrants 2,173,913 — 2022 Unit Offering - Underwriter Warrants 108,696 — Unvested restricted stock units 14,599 42,993 Unvested restricted stock awards 334 1,620 Total 2,602,792 418,521 (1) Amounts for shares of common stock issuable upon conversion of convertible notes were excluded for the 2022 period due to the waiver of the Required Reserve Amount (see Note 6). |
Description of Business (Detail
Description of Business (Details Textual) - USD ($) | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Marketable Securities [Line Items] | |||
Description of liquidity and capital resources | We anticipate that the initiatives and actions associated with our plan described above will provide us with sufficient liquidity in order to operate our business in the normal course for the remainder of 2022 due primarily to the fact that the debt service obligations associated with the Senior Convertible Notes have been deferred to the first half of 2023 and have effectively been substantially pre-funded with the amounts deposited into restricted accounts as required by the Convertible Notes Amendment. In the remainder of 2022, we plan to continue to rigorously explore potential financing alternatives and other strategic options. In addition to and to the extent practical in the future, based on market conditions, we will consider incremental offerings through the ATM Program. From September 30, 2022 through November 10, 2022, we have utilized $0.9 million of the total $3.5 million authorized by the ATM Program. The earn-out payment associated with a 2021 acquisition, which is intended to be made in shares of Common Stock, is scheduled to be settled by the end of December 2022 (see Note 3). If the seller elects for the settlement to be made in cash, it becomes subject to a reduction of 25 percent and could be deferred into the first quarter of 2023. | ||
Cash in operations | $ (10,450,906) | $ (5,077,544) | |
Working capital | 6,800,000 | ||
Cash | 2,500,000 | ||
Loss from operations | 11,100,000 | 13,300,000 | |
Cash in operations | 10,500,000 | 5,100,000 | |
Conversion amount | $ 138,419 | $ 17,452,497 | |
Common stock par value (in dollars per share) | $ 0.0001 | $ 0.0001 | |
Description of going concern and management plan | (the “SPA”) </span>associated with our 2021 Senior Convertible Notes (the “Senior Convertible Notes”) on June 30, 2022 (the “Convertible Notes Amendment”) which, among other factors, provides for the deferral of the required amortization payments due and payable from July 1, 2022 through January 1, 2023 (see Note 6), (iii) securing a waiver from the holders of the Senior Convertible Notes on September 27, 2022 to maintain a reserve of authorized shares equivalent to 200 percent of the total number shares required to satisfy the obligations under the Senior Convertible Notes (the “Required Reserve Amount”), effectively <span style="color: #000000; font-family: 'Times New Roman', serif; font-size: 13.3333px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-align: justify; text-indent: 44.4444px; text-transform: none; white-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-thickness: initial; text-decoration-style: initial; text-decoration-color: initial; float: none; display: inline !important; line-height: inherit;">continuing a similar waiver provided by the holders on June 30, 2022, </span>for a period retroactive to August 30, 2022 through November 30, 2022, (iv) deployment for working capital needs of the net proceeds of approximately $2.0 million received from our offering of Common Stock and warrants (the “2022 Unit Offering”) in a transaction that closed on July 5, 2022 (see Note 10), net of underwriting discounts and commissions and other offering expenses and after depositing $7.0 million of the proceeds into certain restricted cash accounts in accordance with the Convertible Notes Amendment, (v) opportunistic utilization of our “at the market” offering program (the “ATM Program”) for short-term liquidity needs (see Note 10), <span style="font-size: 10pt; font-family: 'Times New Roman', serif; border-left: none; border-right: none; color: #000000; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-transform: none; white-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-thickness: initial; text-decoration-style: initial; text-decoration-color: initial; float: none; display: inline !important; line-height: inherit;">(vi) addressing the potential liquidity of our Common Stock and increasing the viability of our ATM Program in connection with the minimum listing requirements for the Nasdaq Market through </span><span style="font-size: 10pt; font-family: 'Times New Roman', serif; border-left: none; border-right: none; color: #000000; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-transform: none; white-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-thickness: initial; text-decoration-style: initial; text-decoration-color: initial; float: none; display: inline !important; line-height: inherit;">the Reverse Stock Split that was approved by our shareholders on November 7, 2022 and effectuated at 12:01 a.m Eastern Standard Time on November 8, 2022 (see Note 10), <span style="color: #000000; font-family: 'Times New Roman', serif; font-size: 13.3333px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-align: justify; text-indent: 44.4444px; text-transform: none; white-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-thickness: initial; text-decoration-style: initial; text-decoration-color: initial; float: none; display: inline !important; line-height: inherit;">(vii) conservatively managing our working capital through disciplined cost-containment efforts and strategic<span style="line-height: inherit;"> </span></span>management<span style="line-height: inherit;"> </span>of our accounts receivable and accounts payable cycles, (viii) considering strategic partnerships and evaluating potential strategic transactions, as opportunities become available and (ix) </span></span><span style="font-size: 10pt; font-family: 'Times New Roman', serif; border-left: none; border-right: none; color: #000000; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-transform: none; white-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-thickness: initial; text-decoration-style: initial; text-decoration-color: initial; float: none; display: inline !important; line-height: inherit;"> continuing to seek to expand our customer base and realize synergies as we continue to integrate our recent acquisitions with a focus on our core business units</span>." id="sjs-B12"><span>(i) realizing annualized cost savings associated with the corporate restructuring initiative (the “Restructuring”) that we announced in May 2022 which resulted in a reduction in workforce and related operating costs (see Note 4), (ii) entering into an amendment and waiver agreement to the securities purchase agreement <span style="color: #000000; font-family: 'Times New Roman'; font-size: 13.3333px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-align: justify; text-indent: 44.44px; text-transform: none; white-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-thickness: initial; text-decoration-style: initial; text-decoration-color: initial; float: none; display: inline !important; line-height: inherit;">(the “SPA”) </span>associated with our 2021 Senior Convertible Notes (the “Senior Convertible Notes”) on June 30, 2022 (the “Convertible Notes Amendment”) which, among other factors, provides for the deferral of the required amortization payments due and payable from July 1, 2022 through January 1, 2023 (see Note 6), (iii) securing a waiver from the holders of the Senior Convertible Notes on September 27, 2022 to maintain a reserve of authorized shares equivalent to 200 percent of the total number shares required to satisfy the obligations under the Senior Convertible Notes (the “Required Reserve Amount”), effectively <span style="color: #000000; font-family: 'Times New Roman', serif; font-size: 13.3333px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-align: justify; text-indent: 44.4444px; text-transform: none; white-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-thickness: initial; text-decoration-style: initial; text-decoration-color: initial; float: none; display: inline !important; line-height: inherit;">continuing a similar waiver provided by the holders on June 30, 2022, </span>for a period retroactive to August 30, 2022 through November 30, 2022, (iv) deployment for working capital needs of the net proceeds of approximately $2.0 million received from our offering of Common Stock and warrants (the “2022 Unit Offering”) in a transaction that closed on July 5, 2022 (see Note 10), net of underwriting discounts and commissions and other offering expenses and after depositing $7.0 million of the proceeds into certain restricted cash accounts in accordance with the Convertible Notes Amendment, (v) opportunistic utilization of our “at the market” offering program (the “ATM Program”) for short-term liquidity needs (see Note 10), <span style="font-size: 10pt; font-family: 'Times New Roman', serif; border-left: none; border-right: none; color: #000000; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-transform: none; white-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-thickness: initial; text-decoration-style: initial; text-decoration-color: initial; float: none; display: inline !important; line-height: inherit;">(vi) addressing the potential liquidity of our Common Stock and increasing the viability of our ATM Program in connection with the minimum listing requirements for the Nasdaq Market through </span><span style="font-size: 10pt; font-family: 'Times New Roman', serif; border-left: none; border-right: none; color: #000000; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-transform: none; white-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-thickness: initial; text-decoration-style: initial; text-decoration-color: initial; float: none; display: inline !important; line-height: inherit;">the Reverse Stock Split that was approved by our shareholders on November 7, 2022 and effectuated at 12:01 a.m Eastern Standard Time on November 8, 2022 (see Note 10), <span style="color: #000000; font-family: 'Times New Roman', serif; font-size: 13.3333px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-align: justify; text-indent: 44.4444px; text-transform: none; white-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-thickness: initial; text-decoration-style: initial; text-decoration-color: initial; float: none; display: inline !important; line-height: inherit;">(vii) conservatively managing our working capital through disciplined cost-containment efforts and strategic<span style="line-height: inherit;"> </span></span>management<span style="line-height: inherit;"> </span>of our accounts receivable and accounts payable cycles, (viii) considering strategic partnerships and evaluating potential strategic transactions, as opportunities become available and (ix) </span></span><span style="font-size: 10pt; font-family: 'Times New Roman', serif; border-left: none; border-right: none; color: #000000; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-transform: none; white-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-thickness: initial; text-decoration-style: initial; text-decoration-color: initial; float: none; display: inline !important; line-height: inherit;"> continuing to seek to expand our customer base and realize synergies as we continue to integrate our recent acquisitions with a focus on our core business units</span>. | ||
Bid price (in dollar per share) | $ 1 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Long-lived assets: | ||
Long-Lived assets | $ 34,336 | $ 37,585 |
United States | ||
Long-lived assets: | ||
Long-Lived assets | 28,234 | 32,356 |
Canada | ||
Long-lived assets: | ||
Long-Lived assets | $ 6,102 | $ 5,229 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details 1) - USD ($) | 3 Months Ended | 9 Months Ended | |||||||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Jul. 05, 2022 | Jun. 30, 2022 | Dec. 31, 2021 | Jun. 30, 2021 | Dec. 31, 2020 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||
Common stock, par value | $ 20,094,685 | $ 64,418,307 | $ 20,094,685 | $ 64,418,307 | $ 12,945,012 | $ 59,949,683 | $ 61,962,363 | $ 57,222,621 | |
Weighted average common stock outstanding | 3,883,847 | 1,322,122 | 2,421,262 | 1,215,626 | |||||
Loss per share | $ (0.59) | $ (1.17) | $ (22.23) | $ (11.61) | |||||
Warrant exercise prices | $ 4.6 | ||||||||
Unvested Restricted Stock Units [Member] | |||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||
Outstanding common stock equivalents | $ 14,599 | $ 14,599 | |||||||
Unvested Retsricted Stock Awards [Member] | |||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||
Outstanding common stock equivalents | $ 334 | $ 334 | |||||||
Common Stock [Member] | |||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||
Shares, Outstanding | 4,023,294 | 1,358,395 | 4,023,294 | 1,358,395 | 1,841,336 | 1,550,094 | 1,266,621 | 995,062 | |
Common stock, par value | $ 402 | $ 136 | $ 402 | $ 136 | $ 184 | $ 155 | $ 127 | $ 100 | |
Additional paid-in capital [Member] | |||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||
Common stock, par value | $ 159,841,800 | $ 132,806,240 | $ 159,841,800 | $ 132,806,240 | $ 150,441,933 | $ 146,030,203 | $ 123,859,055 | $ 94,088,323 | |
Two Thousand Twenty Two Common Warrant [Member] | |||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||
Warrant exercise prices | $ 4.6 | $ 4.6 | |||||||
Outstanding common stock equivalents | $ 2,173,913 | $ 2,173,913 | |||||||
Two Thousand Twenty Two Underwriter Warrant [Member] | |||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||
Warrant exercise prices | $ 4.6 | $ 4.6 | |||||||
Outstanding common stock equivalents | $ 108,696 | $ 108,696 | |||||||
Two Thousand Twenty Two Pre-funded Warrant [Member] | |||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||
Warrant exercise prices | $ 0.002 | $ 0.002 | |||||||
Two Thousand Nighteen Public and Private Warrants [Member] | |||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||
Warrant exercise prices | 230 | 230 | |||||||
Senior Convertible Notes Conversion Price [Member] | |||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||
Warrant exercise prices | $ 6.21 | $ 6.21 | |||||||
Two Thousand Nighteen Public Warrants [Member] | |||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||
Outstanding common stock equivalents | $ 290,690 | $ 290,690 | |||||||
Two Thousand Nighteen Private Warrants [Member] | |||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||
Outstanding common stock equivalents | $ 11,282 | $ 11,282 | |||||||
Prior to Reverse Split [Member] | |||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||
Weighted average common stock outstanding | 77,676,935 | 26,442,446 | 48,425,236 | 24,312,510 | |||||
Loss per share | $ (0.03) | $ (0.06) | $ (1.11) | $ (0.58) | |||||
Prior to Reverse Split [Member] | Unvested Restricted Stock Units [Member] | |||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||
Outstanding common stock equivalents | $ 291,983 | $ 291,983 | |||||||
Prior to Reverse Split [Member] | Unvested Retsricted Stock Awards [Member] | |||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||
Outstanding common stock equivalents | $ 6,679 | $ 6,679 | |||||||
Prior to Reverse Split [Member] | Common Stock [Member] | |||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||
Shares, Outstanding | 80,465,890 | 27,167,917 | 80,465,890 | 27,167,917 | 36,826,733 | 31,001,884 | 25,332,439 | 19,901,248 | |
Common stock, par value | $ 8,047 | $ 2,717 | $ 8,047 | $ 2,717 | $ 3,680 | $ 3,100 | $ 2,533 | $ 1,990 | |
Prior to Reverse Split [Member] | Additional paid-in capital [Member] | |||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||
Common stock, par value | $ 159,834,155 | $ 132,803,659 | $ 159,834,155 | $ 132,803,659 | $ 150,438,437 | $ 146,027,258 | $ 123,856,649 | $ 94,086,433 | |
Prior to Reverse Split [Member] | Two Thousand Twenty Two Common Warrant [Member] | |||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||
Warrant exercise prices | $ 0.23 | $ 0.23 | |||||||
Outstanding common stock equivalents | $ 43,478,261 | $ 43,478,261 | |||||||
Prior to Reverse Split [Member] | Two Thousand Twenty Two Underwriter Warrant [Member] | |||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||
Warrant exercise prices | $ 0.23 | $ 0.23 | |||||||
Outstanding common stock equivalents | $ 2,173,913 | $ 2,173,913 | |||||||
Prior to Reverse Split [Member] | Two Thousand Twenty Two Pre-funded Warrant [Member] | |||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||
Warrant exercise prices | $ 0.0001 | $ 0.0001 | |||||||
Prior to Reverse Split [Member] | Two Thousand Nighteen Public and Private Warrants [Member] | |||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||
Warrant exercise prices | 11.5 | 11.5 | |||||||
Prior to Reverse Split [Member] | Senior Convertible Notes Conversion Price [Member] | |||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||
Warrant exercise prices | $ 0.3105 | $ 0.3105 | |||||||
Prior to Reverse Split [Member] | Two Thousand Nighteen Public Warrants [Member] | |||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||
Outstanding common stock equivalents | $ 5,813,804 | $ 5,813,804 | |||||||
Prior to Reverse Split [Member] | Two Thousand Nighteen Private Warrants [Member] | |||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||
Outstanding common stock equivalents | $ 225,635 | $ 225,635 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies (Details Textual) $ in Millions | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2022 USD ($) Customers | Sep. 30, 2021 | Dec. 31, 2021 USD ($) Customers | |
Product Information [Line Items] | |||
Allowance for doubtful accounts | $ | $ 0.9 | $ 0.3 | |
Number of Operating Segments | 1 | ||
One Other Government Customer [Member] | Total Revenues [Member] | |||
Product Information [Line Items] | |||
Number of Customer | 1 | 1 | |
One Other Government Customer [Member] | Total Revenues [Member] | Revenue from Rights Concentration Risk [Member] | |||
Product Information [Line Items] | |||
Concentration risk percentage | 12% | 11% | |
Two Government Client [Member] | Account Receivable [Member] | Revenue from Rights Concentration Risk [Member] | |||
Product Information [Line Items] | |||
Concentration risk percentage | 36% | ||
Number of Customer | 2 | ||
Two Government Customers One [Member] | Account Receivable [Member] | |||
Product Information [Line Items] | |||
Number of Customer | 2 | ||
Two Government Customers One [Member] | Account Receivable [Member] | Customer Concentration Risk [Member] | |||
Product Information [Line Items] | |||
Concentration risk percentage | 46% |
Significant Transactions (Detai
Significant Transactions (Details 1) - 365 Cannabis [Member] $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 USD ($) | ||
Business Acquisition [Line Items] | ||
Shares issued | $ 11,060 | |
Cash | 4,982 | |
Contingent consideration | 6,300 | [1] |
Total fair value of consideration transferred | $ 22,342 | |
[1]The fair value of the acquisition date contingent consideration was reduced to $6.3 million during the three months ended September 30, 2022. |
Significant Transactions (Det_2
Significant Transactions (Details 2) - 365 Cannabis [Member] $ in Thousands | Sep. 30, 2022 USD ($) |
Business Acquisition [Line Items] | |
Cash | $ 527 |
Accounts receivable | 486 |
Prepaid expenses and other current assets | 261 |
Fixed Assets | 93 |
Non-compete agreement | 80 |
Acquired technology | 1,040 |
Customer relationships | 13,810 |
Acquired trade name | 270 |
Goodwill | 12,489 |
Accounts payable and accrued expenses | (2,588) |
Deferred tax liabilities | (826) |
Deferred revenue | (3,300) |
Net assets acquired | $ 22,342 |
Significant Transactions (Det_3
Significant Transactions (Details 3) - USD ($) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2022 | Sep. 30, 2022 | |
Business Combination and Asset Acquisition [Abstract] | ||
Revenue | $ 7,520,320 | $ 22,218,616,000 |
Net loss | $ 1,982,553 | $ 15,472,157,000 |
Significant Transactions (Det_4
Significant Transactions (Details Textual) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||
May 23, 2022 | Oct. 02, 2021 USD ($) shares | Apr. 02, 2021 USD ($) shares | May 31, 2022 USD ($) Employees | Sep. 30, 2022 USD ($) $ / shares shares | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) $ / shares shares | Sep. 30, 2021 USD ($) | Dec. 31, 2021 USD ($) $ / shares shares | Oct. 10, 2022 shares | Jul. 05, 2022 shares | |
Business Acquisition [Line Items] | |||||||||||
Exchangeable shares | shares | 18,094 | 18,094 | |||||||||
Revenues | $ 5,412,802 | $ 5,135,502 | $ 18,449,524 | $ 14,056,414 | |||||||
Common stock, shares issued (in shares) | shares | 4,023,294 | 4,023,294 | 1,550,094 | ||||||||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||||||
Preferred stock, liquidation preference (in dollars per share) | $ / shares | $ 1 | $ 1 | |||||||||
Transaction costs | $ 600,000 | ||||||||||
Sales and marketing costs | 300,000 | ||||||||||
Product development costs | $ 300,000 | ||||||||||
Aggregate value of exchangeable shares | $ 138,419 | $ 138,419 | |||||||||
Convertible into shares of common stock per share | $ / shares | $ 3.518 | $ 3.518 | |||||||||
Number of employees | Employees | 59 | ||||||||||
Restructuring reduction employees percentage | 33% | ||||||||||
General and administrative expenses | $ 100,000 | ||||||||||
Fair value of the contingent consideration | $ 6,300,000 | $ 6,300,000 | |||||||||
Acquisition of net income | $ 1,982,553 | 15,472,157,000 | |||||||||
Reduction of purchase price | $ 25 | ||||||||||
Underwriting Agreement, Description | including legal and other professional fees</span>." id="sjs-H20">(i) an increase to Common Stock of $217 representing the issuance of 1,469,143 shares of Common Stock attributable to the Units and the issuance of 704,770 shares of Common Stock from the exercise of the Pre-funded Warrants<span>, both at their par value of $0.0001 per share </span>and (ii) an increase to Additional Paid-In Capital of $9.2 million for the amounts received over par value less the underwriting discounts and commissions and related expenses <span style="color: #000000; font-family: 'times new roman', times; font-size: 13.3333px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-align: justify; text-indent: 48px; text-transform: none; white-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-thickness: initial; text-decoration-style: initial; text-decoration-color: initial; float: none; display: inline !important;">including legal and other professional fees</span>. | ||||||||||
Reduction of working capital | $ 1,500,000 | ||||||||||
Common stock offering percentage | 25% | ||||||||||
Offering shares of common stock | shares | 402,345 | 402,345 | |||||||||
Initially measured at a fair value | $ 6.3 | ||||||||||
Underwriter Warrants [Member] | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Exchangeable shares | shares | 108,696 | 108,696 | |||||||||
Underwriter Warrants [Member] | Minimum [Member] | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Underwriter warrants to purchase | shares | 108,696 | ||||||||||
Subsequent Event [Member] | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Exchangeable shares issued | shares | 402,345 | ||||||||||
Warrant [Member] | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Underwriting Agreement, Description | Underwriting Agreement and upon closing of the Unit Offering, we issued to the Underwriter warrants to purchase up to 2,173,913 shares of Common Stock (the “Underwriter Warrants” and, together with the Common Warrants and the Pre-Funded Warrants, the “Warrants”), which is 5.0% of the aggregate number of Shares and Shares issuable upon exercise of the Pre-Funded Warrants sold in the Unit Offering. The Underwriter Warrants are exercisable at any time and from time to time, in whole or in part, commencing from six months after June 29, 2022 (the "Effective Date") and ending five years from the Effective Date, at a price per share equal to $0.23, which is the public offering price per unit. | ||||||||||
Viridian Sciences [Member] | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Exchangeable shares | shares | 50,000,000,000 | ||||||||||
Reduction of contingent consideration | $ 6,000,000 | ||||||||||
Stock Consideration in Cash | $ 1,000,000 | ||||||||||
Cannabis [Member] | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Cash | 5,000,000 | ||||||||||
Aggregate stock price | 8 | ||||||||||
Fair value of the contingent consideration | $ 3.3 | $ 3.3 | |||||||||
Common stock issued in business combinations | $ 12,000,000 | ||||||||||
365 Cannabis [Member] | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Cash | 527,000 | 527,000 | |||||||||
Common stock, shares issued (in shares) | shares | 180,000,000,000 | ||||||||||
Value of shares issued for exchangeable shares | 11,060,000 | ||||||||||
Reduction of purchase price | 1,500,000 | ||||||||||
Receivables booked in other current assets | $ 400,000 | 400,000 | |||||||||
Reduction of working capital | $ 200,000 | ||||||||||
Shares held in escrow, value | $ 900,000 | ||||||||||
Shares held in escrow | shares | 13,988 |
Revenue and Contracts with Cu_3
Revenue and Contracts with Customers (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Disaggregation of Revenue [Line Items] | ||
Revenue disaggregation | $ 18,450 | $ 14,056 |
Enterprise [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue disaggregation | 8,478 | 2,366 |
Non-enterprise [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue disaggregation | $ 9,972 | $ 11,690 |
Revenue and Contracts with Cu_4
Revenue and Contracts with Customers (Details 1) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Disaggregation of Revenue [Line Items] | ||
Revenue disaggregation | $ 18,450 | $ 14,056 |
United States [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue disaggregation | 12,814 | 10,272 |
Canada [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue disaggregation | $ 5,636 | $ 3,784 |
Revenue and Contracts with Cu_5
Revenue and Contracts with Customers (Details 2) $ in Thousands | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Deferred revenue activity | |
Deferred revenue Beginning Balance | $ 4,126 |
Net additions | 11,793 |
Revenue recognized | (13,269) |
Deferred revenue Ending Balance | $ 2,650 |
Revenue and Contracts with Cu_6
Revenue and Contracts with Customers (Details 3) $ in Thousands | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Change in Contract with Customer, Liability [Abstract] | |
Deferred contract costs Beginning Balance | $ 261 |
Additions | 289 |
Amortized costs | (276) |
Deferred contract costs Ending Balance | $ 274 |
Revenue and Contracts with Cu_7
Revenue and Contracts with Customers (Details Textual) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |||
Unsatisfied performance obligations | $ 23,000 | ||
Revenue expected to be recognized | 12,200 | ||
Revenue recognized | (13,269) | ||
Deferred revenue | 18,400 | $ 3,800 | |
Adjusted for adoption | $ 18,450 | $ 14,056 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets, Net (Details Textual) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Jun. 30, 2022 | |
Finite-Lived Intangible Assets [Line Items] | ||||
Weighted to the income approach, percentage | 50% | |||
Impairment expense | $ 3.2 | |||
Enterprise Reporting Unit [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Weighting to the market approach, percentage | 50% | |||
Impairment expense | $ 12.9 | |||
Non-Enterprise Reporting Unit [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Weighting to the market approach, percentage | 75% | |||
Weighted to the income approach, percentage | 25% | |||
Impairment expense | $ 11.2 | $ 12.3 | $ 23.5 |
Long Term Debt (Details)
Long Term Debt (Details) - USD ($) | Sep. 30, 2022 | Jun. 30, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Dec. 31, 2020 |
Long-Term Debt, by Current and Noncurrent [Abstract] | ||||||
Fair value of debt | $ 14,475,000 | $ 13,388,000 | $ 17,305,000 | $ 3,834,001 | $ 6,152,000 | $ 13,398,000 |
Less:Current portion | (9,900,000) | (13,200,000) | ||||
Noncurrent portion | $ 4,575,000 | $ 4,105,000 |
Long Term Debt (Details Textual
Long Term Debt (Details Textual) - USD ($) | 9 Months Ended | ||||
Oct. 05, 2021 | Jun. 09, 2020 | Sep. 30, 2022 | Sep. 30, 2021 | Oct. 04, 2022 | |
Debt Instrument [Line Items] | |||||
Cash | $ 2,500,000 | ||||
Fair value of senior convertible notes | 14,500,000 | ||||
Securities Purchase Agreement [Member] | |||||
Debt Instrument [Line Items] | |||||
Conversion price per share | $ 6.21 | ||||
Senior Convertible Notes [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt principal amount | 5,400,000 | ||||
Conversion price per share | $ 4.75 | ||||
Debt conversion, description | (i) the conversion price then in effect, or (ii) 80% of the lower of (x) the volume-weighted average price (“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 Common Stock for each of the two trading days with the lowest VWAP of the Common Stock during the ten 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 $<span>10.80</span> per share. | ||||
Debt covenant, description | (a) we are subject to a daily cash test of having an available cash balance of at least $7.0 million, which amount shall be reduced by $1.0 million on each of the dates at which the aggregate principal due upon the Senior Convertible Notes is equal to or less than $14.0 million and $11.0 million, subject in all cases to a minimum of $5.0 million, and (b) we established and maintain bank accounts for each holder for an aggregate amount of $7.0 million with such amount to be released from the accounts only upon the written consent of such holder, provided that $1.0 million will automatically release from the accounts upon the occurrence of each of the dates at which the aggregate principal due upon the Senior Convertible Notes is equal to or less than $14.0 million and $11.0 million, subject to certain conditions. Further the holders of the Senior Convertible Notes waived provisions such that (i) no amortization payments are due and payable for any payments previously required to be made from July 1, 2022 through January 1, 2023, (ii) the holders of the Senior Convertible Notes will not accelerate any previously deferred installment amounts until January 1, 2023 and (iii) the terms of the SPA which would provide for reset of the conversion price of the Senior Convertible Notes as a result of the issuance of securities under the 2022 Unit Offering (see Note 10) and instead agree to a reset of the conversion price equal to a per share price of 135% of the 2022 Unit Offering price, or $6.21 per unit, which was subsequently reduced to $4.75 per share on October 4, 2022 as described above. | ||||
Cash | 1,400,000 | ||||
Proceeds from common stock | 3,900,000 | ||||
Fair value of senior convertible notes | 2,500,000 | ||||
Increase in debt | 300,000 | ||||
Accumulated in equity and an increase | 2,800,000 | ||||
Senior Convertible Notes [Member] | Securities Purchase Agreement [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument, annual principal payment | $ 20 | ||||
Debt principal amount | $ 18,000,000 | ||||
Interest rate original issue discount percentage | 10% | ||||
Original issue discount | $ 2,000,000 | ||||
Maturity date | Oct. 04, 2024 | ||||
2020 Notes [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt principal amount | $ 17,000,000 | 11,600,000 | |||
Cash | 1,200,000 | ||||
Proceeds from common stock | 10,400,000 | ||||
Fair value of senior convertible notes | 2,000,000 | ||||
Increase in debt | $ 100,000 | ||||
Purchase price | $ 15,000,000 |
Income Taxes (Details Textual)
Income Taxes (Details Textual) - USD ($) | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | ||
Uncertain tax position | $ 100,000 | |
Effective tax rate | 0.50% | 0.07% |
Operating Loss Carryforwards, Limitations on Use | 80 | |
Cash paid for income taxes, net of refunds received | $ 12,200 | $ 10,570 |
Income tax refunds | $ 100,000 | $ 100,000 |
Supplemental Balance Sheet Di_3
Supplemental Balance Sheet Disclosures (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Balance Sheet Related Disclosures [Abstract] | ||
Software and technology | $ 399,824 | $ 687,740 |
Professional services, dues and subscriptions | 297,106 | 546,126 |
Insurance | 215,762 | 264,097 |
Deferred contract costs | 273,521 | 260,899 |
Unbilled receivables | 841,453 | 506,984 |
Other | 302,366 | 117,918 |
Total prepaid expenses and other current assets | $ 2,330,032 | $ 2,383,764 |
Supplemental Balance Sheet Di_4
Supplemental Balance Sheet Disclosures (Details 1) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Balance Sheet Related Disclosures [Abstract] | ||
Accounts payable | $ 1,270,695 | $ 1,943,457 |
Professional fees | 234,750 | 319,590 |
Sales taxes | 515,789 | 360,361 |
Compensation | 517,359 | 1,123,467 |
Contractors | 556,766 | 1,288,730 |
Settlements and legal | 1,084,294 | 681,045 |
Other | 451,028 | 346,870 |
Total accounts payable and accrued liabilities | $ 4,630,681 | $ 6,063,520 |
Commitments and Contingencies (
Commitments and Contingencies (Details Textual) - USD ($) | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||
Jun. 30, 2022 | Sep. 30, 2022 | Dec. 31, 2021 | Apr. 02, 2021 | Nov. 23, 2020 | |
Loss Contingencies [Line Items] | |||||
Termination fee | $ 500,000 | ||||
Legal proceedings | no | ||||
TechMagic USA LLC [Member] | |||||
Loss Contingencies [Line Items] | |||||
Issued and outstanding shares percentage | 5% | ||||
Loss contingency | $ 0.5 | $ 200,000 | $ 200,000 | ||
TreCom Systems Group Inc [Member] | |||||
Loss Contingencies [Line Items] | |||||
Recovery amount | $ 2,000,000 |
Equity (Details)
Equity (Details) | 2 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||||
Nov. 07, 2022 | Oct. 10, 2022 shares | Oct. 10, 2022 USD ($) shares | Sep. 28, 2022 USD ($) | Sep. 28, 2022 | Oct. 23, 2022 USD ($) shares | Sep. 30, 2022 USD ($) $ / shares shares | Dec. 31, 2021 USD ($) $ / shares | Oct. 04, 2022 $ / shares shares | Jul. 05, 2022 $ / shares shares | Dec. 31, 2019 $ / shares shares | Oct. 10, 2018 shares | Feb. 08, 2018 $ / shares shares | ||
Stockholders' Equity Note [Abstract] | ||||||||||||||
Preferred Stock, Par or Stated Value Per Share | $ / shares | $ 0.0001 | $ 0.0001 | ||||||||||||
Exchangeable shares | 18,094 | |||||||||||||
Special voting preferred stock, description | reverse stock split of the outstanding shares of Common Stock by a ratio of 20 for 1 | |||||||||||||
Preferred stock, liquidation preference (in dollars per share) | $ / shares | $ 1 | |||||||||||||
Exchangable shares, issued | 904 | |||||||||||||
Exchangeable shares, outstanding | 291,192 | |||||||||||||
Purchase price per unit (in dollars per share) | $ / shares | $ 3.518 | |||||||||||||
Exercise price | $ / shares | $ 4.6 | |||||||||||||
Exchange ratio of converted warrants upon conversion | 1 | |||||||||||||
Description of unit offering | (i) 29,382,861 units consisting of 1,469,143 shares of Common Stock together with Common Stock warrants (the “Common Warrants”) to purchase up to 1,469,143 shares of Common Stock (together, the “Units”) and (ii) 14,095,400 pre-funded units, consisting of 14,095,400 pre-funded warrants (“Pre-funded Warrants”) to purchase 704,770 shares of Common Stock, together with Common Warrants to purchase up to 704,770 shares of Common Stock (together, the “Pre-funded Units”). The Units were sold at a public offering price of $0.23 per unit and the Pre-funded Units were sold at a public offering price of $0.2299 per pre-funded unit. | |||||||||||||
Underwriting Agreement, Description | including legal and other professional fees</span>." id="sjs-I14">(i) an increase to Common Stock of $217 representing the issuance of 1,469,143 shares of Common Stock attributable to the Units and the issuance of 704,770 shares of Common Stock from the exercise of the Pre-funded Warrants<span>, both at their par value of $0.0001 per share </span>and (ii) an increase to Additional Paid-In Capital of $9.2 million for the amounts received over par value less the underwriting discounts and commissions and related expenses <span style="color: #000000; font-family: 'times new roman', times; font-size: 13.3333px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-align: justify; text-indent: 48px; text-transform: none; white-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-thickness: initial; text-decoration-style: initial; text-decoration-color: initial; float: none; display: inline !important;">including legal and other professional fees</span>. | |||||||||||||
Net proceeds | $ | $ 9,200,000 | |||||||||||||
Convertible Notes (at fair value) | $ | $ 7,000,000 | |||||||||||||
Warrants outstanding | 45,652,174 | |||||||||||||
Common warrants shares | 43,478,261 | |||||||||||||
Aggregate value of exchangeable shares | $ | $ 138,419 | |||||||||||||
Outstanding exchanged for shares | 14,560 | |||||||||||||
Effective date | Jun. 29, 2022 | |||||||||||||
Warrants issued | 59,747,574 | |||||||||||||
Convertible Redeemable Preferred Stock [Member] | ||||||||||||||
Stockholders' Equity Note [Abstract] | ||||||||||||||
Convertible redeemable preferred stock, description | The holders of all of the Convertible Redeemable Preferred Stock redeemed their shares for cash at 105% of the stated value, or $10.50 per share, of such shares on November 9, 2022. Accordingly, we directed the escrow agent to pay $5.25 million on November 10, 2022 to the holders from the escrow account established upon the date of the Convertible Redeemable Preferred Stock offering. | |||||||||||||
Exchangeable shares | 3,294,580 | |||||||||||||
Series B Preferred Stock [Member] | ||||||||||||||
Stockholders' Equity Note [Abstract] | ||||||||||||||
Preferred stock, shares issued | 100,000 | |||||||||||||
Preferred Stock, Par or Stated Value Per Share | $ / shares | $ 0.0001 | |||||||||||||
Series A Preferred Stock [Member] | ||||||||||||||
Stockholders' Equity Note [Abstract] | ||||||||||||||
Preferred stock, shares issued | 400,000 | |||||||||||||
Preferred Stock, Par or Stated Value Per Share | $ / shares | $ 0.0001 | |||||||||||||
ATM Program [Member] | ||||||||||||||
Stockholders' Equity Note [Abstract] | ||||||||||||||
Sale of common stock | 118,629 | 90,809 | ||||||||||||
Aggregate purchase price | $ | $ 20 | $ 2,700,000 | $ 800,000 | $ 25,000,000 | ||||||||||
Sale of stock, description | (the “2022 ATM Program”) from time to time through AGP as the sales agent for which they will receive a commission of 3.0% of the gross proceeds. The 2022 ATM Program is currently limited to $3.5 million due to certain restrictions imposed by the registration statement underlying the offering (the “Baby Shelf Limitation”). Under the Baby Shelf Limitation, we may not offer Common Stock under the registration statement with a value of more than one-third of the aggregate market value of our Common Stock held by non-affiliates in any twelve-month period, so long as the aggregate market value of our Common Stock held by non-affiliates is less than $75.0 million. | |||||||||||||
Public Warrant [Member] | ||||||||||||||
Stockholders' Equity Note [Abstract] | ||||||||||||||
Exchangeable shares | 290,690 | |||||||||||||
Private Warrant [Member] | ||||||||||||||
Stockholders' Equity Note [Abstract] | ||||||||||||||
Exercise price | $ / shares | $ 230 | $ 230 | ||||||||||||
Mtech [Member] | ||||||||||||||
Stockholders' Equity Note [Abstract] | ||||||||||||||
Number of shares issued | 287,500 | |||||||||||||
Mtech [Member] | Public Warrant [Member] | Over-Allotment Option [Member] | ||||||||||||||
Stockholders' Equity Note [Abstract] | ||||||||||||||
Shares sold | 37,500 | |||||||||||||
Mtech [Member] | Public Warrant [Member] | IPO [Member] | ||||||||||||||
Stockholders' Equity Note [Abstract] | ||||||||||||||
Purchase price per unit (in dollars per share) | $ / shares | $ 200 | |||||||||||||
Exercise price | $ / shares | 230 | |||||||||||||
Mtech [Member] | Private Warrant [Member] | Private Placement [Member] | ||||||||||||||
Stockholders' Equity Note [Abstract] | ||||||||||||||
Purchase price per unit (in dollars per share) | $ / shares | $ 200 | |||||||||||||
Shares sold | 12,187 | |||||||||||||
Exercise price | $ / shares | $ 230 | |||||||||||||
Pre-Funded Warrants [Member] | ||||||||||||||
Stockholders' Equity Note [Abstract] | ||||||||||||||
Exercise price | $ / shares | $ 0.002 | |||||||||||||
Warrants issued | 14,095,400 | |||||||||||||
Underwriter Warrants [Member] | ||||||||||||||
Stockholders' Equity Note [Abstract] | ||||||||||||||
Exchangeable shares | 108,696 | |||||||||||||
Exercise price | $ / shares | [1] | $ 4.6 | ||||||||||||
Warrants issued | [1] | 2,173,913 | ||||||||||||
Underwriter Warrants [Member] | IPO [Member] | ||||||||||||||
Stockholders' Equity Note [Abstract] | ||||||||||||||
Exercise price | $ / shares | $ 3.518 | |||||||||||||
Underwriter Warrants [Member] | Minimum [Member] | ||||||||||||||
Stockholders' Equity Note [Abstract] | ||||||||||||||
Underwriter warrants to purchase | 108,696 | |||||||||||||
Common Warrant [Member] | ||||||||||||||
Stockholders' Equity Note [Abstract] | ||||||||||||||
Sale of common stock | 2,282,609 | |||||||||||||
Exercise price | $ / shares | [1] | $ 4.6 | ||||||||||||
Common warrants shares | 2,173,913 | |||||||||||||
Warrants issued | [1] | 43,478,261 | ||||||||||||
Subsequent Event [Member] | ||||||||||||||
Stockholders' Equity Note [Abstract] | ||||||||||||||
Sale of common stock | 2,282,609 | |||||||||||||
Shares sold | 402,345 | 402,345 | ||||||||||||
Gross purchase price | $ | $ 900,000 | |||||||||||||
Subsequent Event [Member] | Convertible Redeemable Preferred Stock [Member] | ||||||||||||||
Stockholders' Equity Note [Abstract] | ||||||||||||||
Convertible redeemable preferred stock, description | (the “Series B Preferred Stock”, and together with the Series A Preferred Stock, the “Convertible Redeemable Preferred Stock”), at an offering price of $9.50 per share, representing a 5% original issue discount to the stated value of $10.00 per share, for gross proceeds of approximately $4.75 million in the aggregate, before the deduction of the fees and offering expenses of our financial advisor. The aggregate net proceeds (after deducting the fees and expenses of our financial advisor) together with the additional amount to provide for the 105% redemption premium on the Convertible Redeemable Preferred Stock was deposited in an account with an escrow agent. The shares of the Convertible Redeemable Preferred Stock are convertible, at a conversion price of $0.25 per share (subject in certain circumstances to adjustments), into shares of our Common Stock, at the option of the holders and, in certain circumstances, by the Company. | |||||||||||||
Warrant [Member] | ||||||||||||||
Stockholders' Equity Note [Abstract] | ||||||||||||||
Underwriting Agreement, Description | We granted the Underwriter a 45-day option from the effective date of the 2022 Unit Offering to purchase from us (i) additional shares of Common Stock and/or (ii) Common Warrants and/or (iii) Pre-Funded Warrants, in any combination thereof solely to cover over-allotments | |||||||||||||
Warrants outstanding | 20 | 20 | ||||||||||||
Common Stock [Member] | ||||||||||||||
Stockholders' Equity Note [Abstract] | ||||||||||||||
Number of securities called by each warrant or right | 9,468 | |||||||||||||
Underwriter warrants to purchase | 2,173,913 | |||||||||||||
Common warrants shares | 1 | 1 | ||||||||||||
Common stock per share | $ / shares | $ 230 | |||||||||||||
Exercised shares | 704,770 | |||||||||||||
[1]The Common Warrants and Underwriter Warrants are exercisable for a combined amount of 2,282,609 shares of Common Stock at $4.60 per share or a ratio of 20 warrants for one share of Common Stock. |
Equity (Details 1)
Equity (Details 1) - $ / shares | 9 Months Ended | |||
Sep. 30, 2022 | Jul. 05, 2022 | Dec. 31, 2021 | ||
Class of Warrant or Right [Line Items] | ||||
Beginning balance, outstanding | 51,465,974 | 5,813,800 | ||
Exercise price | $ 4.6 | |||
Warrants issued | 59,747,574 | |||
Exercised | $ (14,095,400) | |||
Expired | ||||
Two Thousand Nineteen Public Warrants [Member] | ||||
Class of Warrant or Right [Line Items] | ||||
Beginning balance, outstanding | [1] | 5,813,800 | 5,813,800 | |
Exercise price | [1] | $ 230 | ||
Expiration Date | [1] | Jun. 19, 2024 | ||
Warrants issued | [1] | |||
Exercised | [1] | |||
Expired | [1] | |||
Pre-funded Warrants [Member] | ||||
Class of Warrant or Right [Line Items] | ||||
Beginning balance, outstanding | [2] | |||
Exercise price | [2] | $ 0.002 | ||
Expiration Date | [2] | Jun. 29, 2027 | ||
Warrants issued | [2] | 14,095,400 | ||
Exercised | [2] | $ (14,095,400) | ||
Expired | [2] | |||
Common Warrant [Member] | ||||
Class of Warrant or Right [Line Items] | ||||
Beginning balance, outstanding | [3] | 43,478,261 | ||
Exercise price | [3] | $ 4.6 | ||
Expiration Date | [3] | Jun. 29, 2027 | ||
Warrants issued | [3] | 43,478,261 | ||
Exercised | [3] | |||
Expired | [3] | |||
Underwriter Warrants [Member] | ||||
Class of Warrant or Right [Line Items] | ||||
Beginning balance, outstanding | [3] | 2,173,913 | ||
Exercise price | [3] | $ 4.6 | ||
Expiration Date | [3] | Jun. 29, 2027 | ||
Warrants issued | [3] | 2,173,913 | ||
Exercised | [3] | |||
Expired | [3] | |||
[1]The 2019 Public Warrants are exercisable for 290,690 shares of Common Stock at $230.00 per share or a ratio of 20 warrants for one share of Common Stock.[2]A total of 14,095,400 Pre-funded Warrants were issued and exercised in exchange for 704,770 shares of Common Stock.[3]The Common Warrants and Underwriter Warrants are exercisable for a combined amount of 2,282,609 shares of Common Stock at $4.60 per share or a ratio of 20 warrants for one share of Common Stock. |
Fair Value (Details)
Fair Value (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Fair value balance at beginning of period | $ 13,388,000 | $ 6,152,000 | $ 17,305,000 | $ 13,398,000 |
Payments of principal | (2,344,226) | (5,380,000) | (11,613,903) | |
Change in fair value reported in the statements of operations | 1,113,000 | 23,227 | 2,840,000 | 2,030,904 |
Change in fair value reported in other comprehensive loss | (26,000) | 3,000 | (290,000) | 19,000 |
Fair value balance at end of period | $ 14,475,000 | $ 3,834,001 | $ 14,475,000 | $ 3,834,001 |
Fair Value (Details 1)
Fair Value (Details 1) - Convertible Debt [Member] - USD ($) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2022 | Dec. 31, 2021 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Face value principal payable | $ 14,660,000 | $ 20,000,000 | |
Original conversion price | [1] | $ 6.21 | $ 81 |
Value of common stock (in dollars per share) | $ 1.8 | $ 35 | |
Expected term (years) | 2 years | 2 years 9 months 18 days | |
Volatility | 92% | 75% | |
Market yield | 45.30% | 37.10% | |
Risk free rate | 4.20% | 1% | |
Issue date | Oct. 05, 2021 | Oct. 05, 2021 | |
Maturity date | Oct. 05, 2024 | Oct. 05, 2024 | |
[1]In accordance with the Convertible Notes Amendment, the conversion price was lowered to $6.21 per share from $81.00 per share through October 4, 2022 (see Note 10). |
Fair Value (Details 2)
Fair Value (Details 2) - Private Warrant [Member] - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | ||||
Fair value balance at beginning of period | $ 11,282 | $ 354,247 | $ 63,178 | $ 311,376 |
Change in fair value reported in the statements of operations | (2,257) | (194,046) | (54,153) | (151,175) |
Fair value balance at end of period | $ 9,025 | $ 160,201 | $ 9,025 | $ 160,201 |
Fair Value (Details 3)
Fair Value (Details 3) - $ / shares | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2022 | Dec. 31, 2021 | Jul. 05, 2022 | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Beginning balance, outstanding | 51,465,974 | 5,813,800 | |
Original conversion price | $ 4.6 | ||
Private Warrant [Member] | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Beginning balance, outstanding | 225,635 | 225,635 | |
Original conversion price | $ 230 | $ 230 | |
Value of common stock (in dollars per share) | $ 1.8 | $ 35 | |
Expected term (years) | 1 year 8 months 15 days | 2 years 5 months 15 days | |
Volatility | 87.60% | 85.80% | |
Risk free rate | 4.10% | 0.80% |
Fair Value (Details 4)
Fair Value (Details 4) - Level 3 [Member] | 9 Months Ended |
Sep. 30, 2022 $ / shares | |
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions and Methodology [Abstract] | |
Exercise price | $ 4.6 |
Expected term (years) | 5 years |
Volatility | 136.90% |
Fair Value (Details Textual)
Fair Value (Details Textual) | Oct. 04, 2022 $ / shares |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Conversion Price per share, increase | $ 81 |
Conversion Price per share, decrease | $ 6.21 |
Earning per Share (Details)
Earning per Share (Details) - shares | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | ||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||
Outstanding shares on fully diluted | 2,602,792 | 418,521 | |
Warrants [Member] | |||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||
Outstanding shares on fully diluted | 108,696 | ||
Unvested restricted stock units [Member] | |||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||
Outstanding shares on fully diluted | 14,599 | 42,993 | |
Unvested restricted stock awards [Member] | |||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||
Outstanding shares on fully diluted | 334 | 1,620 | |
Public Warrants [Member] | |||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||
Outstanding shares on fully diluted | 290,690 | 290,690 | |
Common Warrants [Member] | |||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||
Outstanding shares on fully diluted | 2,173,913 | ||
Shares issuable upon exchange of Exchangeable Shares [Member] | |||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||
Outstanding shares on fully diluted | 14,560 | 19,297 | |
Shares of common stock issuable in upon conversion of Convertible Notes [Member] | |||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||
Outstanding shares on fully diluted | [1] | 63,921 | |
[1]Amounts for shares of common stock issuable upon conversion of convertible notes were excluded for the 2022 period due to the waiver of the Required Reserve Amount (see Note 6). |
Earning per Share (Details Text
Earning per Share (Details Textual) | Oct. 04, 2022 $ / shares |
Earnings Per Share [Abstract] | |
Conversion Price per share, decrease | $ 6.21 |
Conversion Price per share, increase | $ 81 |