Cover
Cover - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Mar. 29, 2024 | Jun. 30, 2023 | |
Document Information [Line Items] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Financial Statement Error Correction [Flag] | false | ||
Entity Interactive Data Current | Yes | ||
ICFR Auditor Attestation Flag | false | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2023 | ||
Document Fiscal Year Focus | 2023 | ||
Document Fiscal Period Focus | FY | ||
Entity Information [Line Items] | |||
Entity Registrant Name | GRYPHON DIGITAL MINING, INC. | ||
Entity Central Index Key | 0001755953 | ||
Entity File Number | 001-39096 | ||
Entity Tax Identification Number | 83-2242651 | ||
Entity Incorporation, State or Country Code | DE | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Shell Company | false | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | true | ||
Entity Ex Transition Period | false | ||
Entity Public Float | $ 4.1 | ||
Entity Contact Personnel [Line Items] | |||
Entity Address, Address Line One | 5953 Mabel Road | ||
Entity Address, Address Line Two | Unit 138 | ||
Entity Address, City or Town | Las Vegas | ||
Entity Address, State or Province | NV | ||
Entity Address, Postal Zip Code | 89110 | ||
Entity Phone Fax Numbers [Line Items] | |||
City Area Code | (877) | ||
Local Phone Number | 646-3374 | ||
Entity Listings [Line Items] | |||
Title of 12(b) Security | Common Stock, par value $0.0001 per share | ||
Trading Symbol | GRYP | ||
Security Exchange Name | NASDAQ | ||
Entity Common Stock, Shares Outstanding | 38,800,340 |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2023 | |
Auditor [Table] | |
Auditor Name | Marcum llp |
Auditor Firm ID | 688 |
Auditor Location | Los Angeles, CA |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Current assets | ||
Cash | $ 768,461 | $ 877,844 |
Restricted cash | 7,000,000 | |
Accounts receivable, net | 147,855 | 429,949 |
Prepaid expenses and other current assets | 420,082 | 1,121,763 |
Current assets of discontinued operations | 1,328,784 | |
Total current assets | 1,336,398 | 10,758,340 |
Fixed assets, net | 21,689 | 48,880 |
Noncurrent assets of discontinued operations | 8,661,272 | |
Total assets | 1,358,087 | 19,468,492 |
Current liabilities | ||
Accounts payable, accrued expenses and other current liabilities | 4,820,630 | 4,023,183 |
Contingent consideration payable | 2,283,806 | |
Current portion of deferred revenue | 399,652 | 568,771 |
Current portion of long-term debt | 5,149,000 | 13,200,000 |
Current liabilities of discontinued operations | 2,432,374 | |
Total current liabilities | 10,369,282 | 22,508,134 |
Deferred revenue, noncurrent | 161,803 | |
Long-term debt, less current portion | 1,407,000 | |
Noncurrent liabilities of discontinued operations | 217,083 | |
Total liabilities | 10,369,282 | 24,294,020 |
Commitments and contingencies (Note 10) | ||
Convertible redeemable preferred stock, par value $0.0001; Series A and Series B, 0 shares issued and outstanding as of December 31, 2023 and 2022 (Note 11) | ||
Stockholders’ deficit | ||
Common stock, par value $0.0001; 150,000,000 shares authorized, 517,605 and 230,140, issued and outstanding as of December 31, 2023 and 2022, respectively | 52 | 23 |
Additional paid-in capital | 164,583,630 | 160,207,804 |
Accumulated other comprehensive income | 227,000 | 347,100 |
Accumulated deficit | (179,144,015) | (167,565,846) |
Total stockholders’ deficit | (9,011,195) | (4,825,528) |
Total liabilities and stockholders’ deficit | 1,358,087 | 19,468,492 |
Series C Preferred Stock | ||
Stockholders’ deficit | ||
Preferred stock, value | 3,422,000 | |
Special Voting Preferred Stock | ||
Stockholders’ deficit | ||
Preferred stock, value | $ 1,900,138 | $ 2,185,391 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - $ / shares | Dec. 31, 2023 | Dec. 31, 2022 |
Convertible redeemable preferred stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 150,000,000 | 150,000,000 |
Common stock, shares outstanding | 517,605 | 230,140 |
Common stock, shares outstanding | 517,605 | 230,140 |
Series A Convertible Redeemable Preferred Stock | ||
Convertible redeemable preferred stock, shares issued | 0 | 0 |
Convertible redeemable preferred stock, shares outstanding | 0 | 0 |
Series B Convertible Redeemable Preferred Stock | ||
Convertible redeemable preferred stock, shares issued | 0 | 0 |
Convertible redeemable preferred stock, shares outstanding | 0 | 0 |
Series C Preferred Stock | ||
Preferred stock, par value (in Dollars per share) | $ 1,000 | $ 1,000 |
Preferred stock, shares authorized | 3,422 | 3,422 |
Preferred stock, shares issued | 3,422 | 0 |
Preferred stock, shares outstanding | 3,422 | 0 |
Special Voting Preferred Stock | ||
Preferred stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 1 | 1 |
Preferred stock, shares issued | 1 | 1 |
Preferred stock, shares outstanding | 1 | 1 |
Preferred stock, liquidation preference (in Dollars per share) | $ 1 | $ 1 |
Exchangeable Shares | ||
Preferred stock, shares issued | 248,484 | 285,672 |
Preferred stock, shares outstanding | 248,484 | 285,672 |
Preferred stock, no par value (in Dollars per share) |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Revenue | ||
Total revenue | $ 6,836,444 | $ 10,458,170 |
Cost of revenue | 3,401,441 | 4,911,503 |
Gross profit | 3,435,003 | 5,546,667 |
Operating expenses | ||
Product development | 2,335,609 | 4,088,294 |
Sales and marketing | 2,293,767 | 5,572,721 |
General and administrative | 5,677,485 | 8,018,255 |
Depreciation and amortization | 27,191 | 4,421,995 |
Impairment of long-lived assets | 26,528,630 | |
Total operating expenses | 10,334,052 | 48,629,895 |
Loss from operations | (6,899,049) | (43,083,228) |
Other (expense) income | ||
Interest expense, net | (1,130,343) | (853,566) |
Change in fair value of convertible notes | (370,457) | (2,884,273) |
Change in fair value of derivative liability | 63,178 | |
Other expense, net | (202,820) | (221,101) |
Total other (expense) income | (1,703,620) | (3,895,762) |
Net loss from continuing operations before income taxes | (8,602,669) | (46,978,990) |
Income tax benefit on continuing operations | 701,119 | |
Net loss from continuing operations | (8,602,669) | (46,277,871) |
Loss from discontinued operations, net of tax | (2,975,500) | (32,779,739) |
Net loss | (11,578,169) | (79,057,610) |
Deemed dividends related to convertible redeemable preferred stock | (955,500) | |
Net loss attributable to common stockholders | $ (11,578,169) | $ (80,013,110) |
Basic weighted average common shares outstanding (in Shares) | 371,020 | 146,393 |
Basic loss per common share from continuing operations (in Dollars per share) | $ (23.19) | $ (322.65) |
Basic loss per common share from discontinued operations (in Dollars per share) | (8.02) | (223.92) |
Basic loss per common share (in Dollars per share) | $ (31.21) | $ (546.56) |
Software | ||
Revenue | ||
Total revenue | $ 6,787,285 | $ 9,748,268 |
Consulting | ||
Revenue | ||
Total revenue | 39,750 | 682,309 |
Other revenue | ||
Revenue | ||
Total revenue | $ 9,409 | $ 27,593 |
Consolidated Statements of Op_2
Consolidated Statements of Operations (Parentheticals) - $ / shares | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Income Statement [Abstract] | ||
Diluted weighted average common shares outstanding (in Shares) (in Shares) | 371,020 | 146,393 |
Diluted loss per common share from continuing operations (in Dollars per share) | $ (23.19) | $ (322.65) |
Diluted earnings (loss) per common share from discontinued operations (in Dollars per share) | (8.02) | (223.92) |
Diluted loss per common share (in Dollars per share) | $ (31.21) | $ (546.56) |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Statement of Comprehensive Income [Abstract] | ||
Net loss | $ (11,578,169) | $ (79,057,610) |
Other comprehensive (loss) income: | ||
Foreign currency translation | (72,100) | 40,577 |
Unrealized (loss) gain on convertible notes | (48,000) | 245,000 |
Comprehensive loss | $ (11,698,269) | $ (78,772,033) |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders’ Deficit - USD ($) | Series A and B Convertible Redeemable Preferred Stock | Series C Preferred Stock | Series C | Special Voting Preferred Stock | Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit | Total |
Balance at Dec. 31, 2021 | $ 2,366,038 | $ 8 | $ 146,030,350 | $ 61,523 | $ (88,508,236) | $ 59,949,683 | |||
Balance (in Shares) at Dec. 31, 2021 | 309,286 | 77,505 | |||||||
Conversion of exchangeable shares to common stock | $ (180,647) | 180,647 | |||||||
Conversion of exchangeable shares to common stock (in Shares) | (23,614) | 59 | |||||||
Settlement of convertible notes | $ 1 | 3,925,499 | 3,925,500 | ||||||
Settlement of convertible notes (in Shares) | 10,371 | ||||||||
Shares withheld for withholding taxes | (9,926) | (9,926) | |||||||
Shares withheld for withholding taxes (in Shares) | (83) | ||||||||
Shares issued (returned) in connection with 365 Cannabis acquisition | (940,000) | (940,000) | |||||||
Shares issued (returned) in connection with 365 Cannabis acquisition (in Shares) | (699) | ||||||||
Common shares and warrants issued in connection with unit offering, net of issue costs | $ 11 | 9,178,950 | 9,178,961 | ||||||
Common shares and warrants issued in connection with unit offering, net of issue costs (in Shares) | 108,696 | ||||||||
Stock-based compensation | 843,693 | 843,693 | |||||||
Stock-based compensation (in Shares) | |||||||||
Shares issued in connection with the ATM offering program | $ 3 | 1,854,562 | 1,854,565 | ||||||
Shares issued in connection with the ATM offering program (in Shares) | 32,148 | ||||||||
Issuance of Series A and B convertible redeemable preferred stock, net of issue costs | $ 4,294,500 | ||||||||
Issuance of Series A and B convertible redeemable preferred stock, net of issue costs (in Shares) | 500,000 | ||||||||
Deemed dividends related to convertible redeemable preferred stock | $ 955,500 | (955,500) | (955,500) | ||||||
Redemption of convertible redeemable preferred stock | $ (5,250,000) | ||||||||
Redemption of convertible redeemable preferred stock (in Shares) | (500,000) | ||||||||
Settlement of liabilities with shares | 49,529 | 49,529 | |||||||
Settlement of liabilities with shares (in Shares) | 110 | ||||||||
Restricted stock vesting | 50,000 | 50,000 | |||||||
Restricted stock vesting (in Shares) | 1,014 | ||||||||
Fractional share adjustment from stock split | |||||||||
Fractional share adjustment from stock split (in Shares) | 1,019 | ||||||||
Foreign currency translation adjustments | 40,577 | 40,577 | |||||||
Unrealized losses on convertible notes | 245,000 | 245,000 | |||||||
Net loss | (79,057,610) | (79,057,610) | |||||||
Balance at Dec. 31, 2022 | $ 2,185,391 | $ 23 | 160,207,804 | 347,100 | (167,565,846) | (4,825,528) | |||
Balance (in Shares) at Dec. 31, 2022 | 285,672 | 230,140 | |||||||
Conversion of exchangeable shares to common stock | $ (285,253) | 285,253 | |||||||
Conversion of exchangeable shares to common stock (in Shares) | (37,188) | 93 | |||||||
Common shares issued in a private placement offering | $ 5 | 499,995 | 500,000 | ||||||
Common shares issued in a private placement offering (in Shares) | 50,000 | ||||||||
Settlement of convertible notes for Series C preferred stock | $ 3,422,000 | 3,422,000 | |||||||
Settlement of convertible notes for Series C preferred stock (in Shares) | 3,422 | ||||||||
Settlement of convertible notes | $ 24 | 3,187,077 | 3,187,101 | ||||||
Settlement of convertible notes (in Shares) | 3,422 | 237,213 | |||||||
Stock-based compensation | 403,501 | 403,501 | |||||||
Stock-based compensation (in Shares) | |||||||||
Restricted stock vesting | |||||||||
Restricted stock vesting (in Shares) | 159 | ||||||||
Foreign currency translation adjustments | (72,100) | (72,100) | |||||||
Unrealized losses on convertible notes | (48,000) | (48,000) | |||||||
Net loss | (11,578,169) | (11,578,169) | |||||||
Balance at Dec. 31, 2023 | $ 3,422,000 | $ 1,900,138 | $ 52 | $ 164,583,630 | $ 227,000 | $ (179,144,015) | $ (9,011,195) | ||
Balance (in Shares) at Dec. 31, 2023 | 3,422 | 248,484 | 517,605 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Cash flows from operating activities | ||
Net loss | $ (11,578,169) | $ (79,057,610) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Gain on sale of discontinued operations, net | (212,601) | |
Loss on sale of investment | 221,101 | |
Bad debt expense | 56,855 | 371,364 |
Stock-based compensation expense | 403,501 | 873,929 |
Depreciation and amortization | 918,898 | 7,834,712 |
Amortization of deferred contract costs | 39,285 | 337,350 |
Non-cash interest expense | 597,276 | |
Foreign currency gain | (22,506) | (14,553) |
Impairment of long-lived assets | 3,065,365 | 61,778,605 |
Change in fair value of convertible notes | 370,457 | 2,884,273 |
Change in fair value of derivative liability | (63,178) | |
Change in fair value of contingent consideration | (4,016,194) | |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | 8,295 | 197,647 |
Prepaid expenses and other current assets | 602,216 | 257,555 |
Other assets | 9,700 | |
Accounts payable, accrued expenses and other current liabilities | 870,152 | (324,166) |
Deferred income tax liabilities | (675,291) | |
Deferred revenue | (410,100) | (2,113,249) |
Net cash used in operating activities | (5,888,352) | (10,900,729) |
Cash flows from investing activities | ||
Developed software additions | (4,345,260) | |
Fixed asset additions | (31,884) | |
Cash paid for business combinations and working capital settlement, net of cash acquired | 400,000 | |
Proceeds received from sale of discontinued operations, net | 1,237,362 | |
Proceeds received from sale of investment | 5,000 | |
Net cash provided by (used in) investing activities | 1,237,362 | (3,972,144) |
Cash flows from financing activities | ||
Value of shares withheld related to tax withholdings | (49) | (9,926) |
Proceeds from unit and pre-funded unit offering, net | 9,178,960 | |
Proceeds from the exercise of pre-funded warrants | 1 | |
Proceeds from private placement offering of common stock | 500,000 | |
Proceeds from the ATM offering program, net | 1,854,565 | |
Proceeds from the issuance of secured promissory note | 1,650,000 | |
Principal payments of convertible notes | (4,917,356) | (1,432,273) |
Proceeds from the issuance of convertible redeemable preferred stock, net | 4,294,500 | |
Redemption of convertible redeemable preferred stock | (5,250,000) | |
Net cash (used in) provided by financing activities | (2,767,405) | 8,635,827 |
Effect of exchange rate changes on cash and restricted cash | 3,601 | (22,225) |
Net decrease in cash and restricted cash | (7,414,794) | (6,259,271) |
Cash and restricted cash of continuing operations - beginning of period | 7,877,844 | 12,937,554 |
Cash and restricted cash of discontinued operations - beginning of period | 305,411 | 1,504,972 |
Cash and restricted cash - beginning of period | 8,183,255 | 14,442,526 |
Cash and restricted cash of continuing operations - end of period | 768,461 | 7,877,844 |
Cash and restricted cash of discontinued operations - end of period | 305,411 | |
Cash and restricted cash - end of period | 768,461 | 8,183,255 |
Cash paid for income taxes, net of refunds received | 15,684 | |
Cash paid for interest, net | 787,187 | 256,440 |
Supplemental disclosure of non-cash investing and financing activity: | ||
Vesting of restricted stock units | 50,000 | |
Settlement of convertible notes in common stock | 3,187,101 | 3,925,500 |
Settlement of convertible notes in preferred stock | 3,422,000 | |
Stock-based compensation capitalized as software development | 19,764 | |
Capitalized software included in accrued expenses | 17,974 | |
Conversion of exchangeable shares to common stock | 285,253 | 180,647 |
Settlement of liabilities with common stock | 49,529 | |
Shares returned in connection with acquisition | 940,000 | |
Termination of contingent consideration obligation in connection with sale of discontinued operations | 2,283,806 | |
Reduction to accrued expenses from an acquisition-related working capital settlement | $ 160,000 |
Description of Business
Description of Business | 12 Months Ended |
Dec. 31, 2023 | |
Description of Business [Abstract] | |
Description of Business | Note 1 – Description of Business Gryphon Digital Mining, Inc. (“Gryphon”), which originally began operations as Ivy Crypto, Inc., was incorporated under the provisions and by the virtue of the provisions of the General Corporation Law of the State of Delaware on October 22, 2020, with its office located in Las Vegas, Nevada. Gryphon operates a digital asset (commonly referred to as cryptocurrency) mining operation using specialized computers equipped with application-specific integrated circuit (ASIC) chips (known as “miners”) to solve complex cryptographic algorithms in support of the Bitcoin blockchain (in a process known as “solving a block”) in exchange for cryptocurrency rewards (primarily Bitcoin). Gryphon became a publicly held entity in February 2024 upon the completion of a reverse merger transaction (the “Merger”) with Akerna Corp., herein referred to as we, us, our, the Company or Akerna. These consolidated financial statements and notes thereto, including disclosures for certain activities up to and including the effective date (the “Effective Date”) of the Merger, or February 9, 2024, are exclusively attributable to the operations of Akerna. Akerna was formed upon completion of the mergers between MTech Acquisition Corp. (“MTech”) and MJ Freeway, LLC (“MJF”) on June 17, 2019 as contemplated by the Merger Agreement dated October 10, 2018, as amended (the “Formation Mergers”). Akerna provided software as a service (“SaaS”) solutions within the cannabis industry that enabled regulatory compliance and inventory management through several wholly-owned subsidiaries including MJF, Trellis Solutions, Inc. (“Trellis”), Ample Organics, Inc. (“Ample”), Last Call Analytics (“LCA”), solo sciences, inc. (“Solo”), Viridian Sciences, Inc. (“Viridian”), and The NAV People, Inc. d.b.a. 365 Cannabis (“365 Cannabis”). Our common stock, $0.0001 par value (“Common Stock”) was traded on the Nasdaq Capital Market (the “Nasdaq”) under the symbol “KERN” through February 9, 2024. During the fourth quarter of 2022, we committed to a number of significant actions that collectively represented a strategic shift in our business strategy and a complete exit from the SaaS business serving the cannabis industry. The shift was effectuated in a two-part exit strategy whereby we (i) disposed of our component SaaS business units in advance of (ii) the Merger with Gryphon, an entity unaffiliated with the SaaS and cannabis industries (see below and Note 4). Prior to the aforementioned shift in strategy, we implemented a restructuring initiative (the “Restructuring”) in May 2022 whereby we reduced our headcount by 59 employees and incurred and paid $0.6 million of associated costs in an effort to minimize costs and streamline the organization. There were no remaining obligations under the Restructuring after December 31, 2022. During 2023, we disposed of 365 Cannabis, LCA and Ample (the “Disposal Group”) through a series of sale transactions. As a result of these transactions, the Disposal Group met the criteria to be considered “discontinued operations” as that term is defined in accounting principles generally accepted in the United States (“GAAP”). Accordingly, the assets and liabilities of these entities are classified and reflected on our consolidated balance sheet as of December 31, 2022 as attributable to “discontinued operations” and their results of operations are classified as “discontinued operations” in the consolidated statements of operations for the years ended December 31, 2023 and 2022, respectively. Certain financial disclosures including major components of the assets and liabilities and results of operations of the Disposal Group are provided in Note 15. We effectively abandoned our operations for Trellis, Solo and Viridian during the year ended December 31, 2023 after all contractual commitments were satisfied with the customers and vendors of those businesses. The results of operations of these business units are reflected in these consolidated financial statements for all periods presented as a component of continuing operations. We committed to the sale of MJF (the “Sale Transaction”) during 2023; however, the required stockholder approval and certain other consents required to complete the Sale Transaction were not obtained until January of 2024. Accordingly, the assets and liabilities and results of operations of MJF are reflected in these consolidated financial statements for all periods presented as a component of continuing operations. The Sale Transaction closed on February 9, 2024 (see Note 4). On January 27, 2023, we entered into an agreement and plan of merger, as amended on April 28, 2023 and June 14, 2023 (the “Merger Agreement”) with Gryphon and Akerna Merger Co. (“Akerna Merger”). Required approval of the Merger Agreement by the stockholders of Akerna and Gryphon as well as approval by Nasdaq of the continued listing of Gryphon after the closing of the Merger was obtained in January 2024. On February 9, 2024, concurrent with the closing of the Sale Transaction, Akerna Merger merged with and into Gryphon, with Gryphon surviving the Merger as a wholly-owned subsidiary of Akerna. Following the closing of the Merger, the former Gryphon and Akerna stockholders immediately before the Merger owned approximately 92.5 percent and 7.5 percent, respectively, of the outstanding capital stock on a fully diluted basis which effectively resulted in a change in control of the Company. Upon completion of the Merger, Akerna changed its name to Gryphon and its common stock began trading on the Nasdaq under the symbol “GRYP.” Additional disclosures regarding the Merger and Sale Transaction and their impact on the results of operations for the year ended December 31, 2023 are more fully described in Note 4. |
Basis of Presentation
Basis of Presentation | 12 Months Ended |
Dec. 31, 2023 | |
Basis of Presentation [Abstract] | |
Basis of Presentation | Note 2 – Basis of Presentation The accompanying consolidated financial statements, which exclusively represent the operations of Akerna through December 31, 2023 and disclosures regarding certain activities up to and including the Effective Date, have been prepared in accordance with GAAP. Going Concern and Management s Liquidity Plans In accordance with the Financial Accounting Standards Board’s (“FASB”) Accounting Standard Codification (“ASC”) 205-40, Going Concern The accompanying consolidated financial statements have been prepared on the basis that Akerna 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 in 2019 we have incurred recurring losses from operations, used cash from operating activities and relied on capital raising activities to continue ongoing operations. Collectively, these factors raise substantial doubt regarding our ability to continue as a going concern for the twelve months from the date our consolidated financial statements were issued in the absence of a significant capital transaction. The accompanying consolidated financial statements do not include any adjustments related to the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should Akerna be unable to continue as a going concern. In connection with the closing of the Sale Transaction and Merger, substantially all of the assets and liabilities of the legacy Akerna business were disposed of such that after February 8, 2024, our assets and liabilities and capital structure reflected those of Gryphon immediately after the closing of those transactions. Since Gryphon began revenue generation in September 2021, management has financed its operations through equity and debt financing and the sale of the digital assets earned through mining operations. Gryphon may incur additional losses from operations and negative cash outflows from operations in the foreseeable future. In the event Gryphon continues to incur losses, it may need to raise debt or equity financing to finance its operations until operations are cashflow positive. However, there can be no assurance that such financing will be available in sufficient amounts and on acceptable terms, when and if needed, or at all. The precise amount and timing of the funding needs cannot be determined accurately at this time and will depend on several factors, including the market price for the underlying commodity mined by the Company and its ability to procure the required mining equipment and operate profitably. The aforementioned factors indicate that management’s plans do not alleviate the substantial doubt about the Company’s ability to continue as a going concern for a period of one year from the issuance of these financial statements Reclassifications Certain prior year amounts have been reclassified to conform to the current year presentation. In addition, and as described and disclosed in Notes 1 and 15, the assets and liabilities and results of operations of the Disposal Group have been reclassified as discontinued operations for all period presented. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 3 – Summary of Significant Accounting Policies The summary of significant accounting policies presented as follows represents those of the legacy Akerna business as applicable for the periods presented herein and through the Effective Date. Principles of Consolidation Our accompanying consolidated financial statements include the accounts of Akerna and our wholly-owned subsidiaries through the date of disposition where applicable. 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 impairment assessments, loss contingencies and the valuation allowance associated with deferred tax 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. Foreign Currency The functional currency of the Company’s non-U.S. operations is the local currency. Monetary assets and liabilities denominated in foreign currencies are translated into U.S. dollars at exchange rates prevailing at the balance sheet dates. Non-monetary assets and liabilities are translated at the historical rates in effect when the assets were acquired or obligations incurred. Revenue and expenses are translated into U.S. dollars using the average rates of exchange prevailing during the period. Translation gains or losses are included as a component of accumulated other comprehensive income (loss) within stockholders’ equity (deficit). Gains and losses resulting from foreign currency transactions are recognized as a component of Other income (expense) in our consolidated statements of operations. Cash and Cash Equivalents We consider liquid instruments purchased with an original maturity of three months or less to be cash equivalents. We continually monitor our positions with, and the credit quality of, the financial institutions with which we invest. As of the balance sheet date, and periodically throughout the year, we have maintained balances in various operating accounts in excess of federally insured limits. Restricted Cash Restricted cash consists of funds that are contractually or legally restricted as to usage or withdrawal and is presented separately from cash on our consolidated balance sheets. Accounts Receivable, Net We maintain an allowance for current expected credit losses based on our historical collection experience, current conditions and reasonable and supportable forecasts. We pool our accounts receivables into two groups: (i) government and government-affiliated customers and (ii) small and medium-sized businesses (“SMB”). The customers within these two groups share similar risk characteristics. The government-affiliated customers generally have a higher credit quality as they are bound by contracts generally backed by the faith and credit of the related governments. Accordingly, we assess the accounts receivable from this group as less risky than those of the SMB group, which is more diverse in size and financial strength. Property and Equipment Property and equipment are recorded at cost, less accumulated depreciation. Expenditures for major additions and improvements are capitalized. Repairs and maintenance costs are expensed as incurred. Depreciation is provided over the estimated useful lives of the related assets using the straight-line method. The estimated useful lives for our furniture and computer equipment were 3 - 7 years. Software Development Costs Costs incurred during the application development stage of a newly developed application and costs we incur to enhance our existing platforms that meet certain criteria are subject to capitalization and subsequent amortization. Our software product development costs are primarily comprised of personnel costs such as payroll and benefits, vendor costs, and other costs directly attributable to the project. We capitalize costs only during the development phase. Any costs in connection to planning, design, and maintenance subsequent to release are expensed as incurred. We amortize software development costs over the expected useful life of the specific application, generally 2-5 years. We evaluate capitalized software development costs for impairment when there is an indication that the unamortized cost may not be recoverable. During the year ended December 31, 2022, we fully impaired our capitalized software development costs for our continuing operations. In addition, we recorded impairment charges attributable to certain capitalized software development costs of the Disposal Group during the year ended December 31, 2022 (see Note 15). Intangible Assets Intangible assets are amortized over their estimated useful lives. We evaluate the estimated remaining useful life of our intangible assets when events or changes in circumstances indicate an adjustment to the remaining amortization may be needed. We similarly evaluate the recoverability of these assets upon events or changes in circumstances indicate a potential impairment. Recoverability of these assets is measured by comparing the carrying amount of each asset to the future undiscounted cash flows the asset is expected to generate. If the undiscounted cash flows used in the test for recoverability are less than the carrying amount of these assets, the carrying amount of such assets is reduced to fair value. During the year ended December 31, 2022, we fully impaired our intangible assets for our continuing operations. In addition, we recorded impairment charges attributable to certain intangible assets of the Disposal Group during the year ended December 31, 2022 (see Note 15). Goodwill Impairment Assessment Goodwill represents the excess purchase consideration of an acquired business over the fair value of the net tangible and identifiable intangible assets. Goodwill is evaluated for impairment annually on October 31, and whenever events or changes in circumstances indicate the carrying value of goodwill may be impaired. Triggering events that may indicate impairment include, but are not limited to, a significant adverse change in customer demand or business climate or a significant decrease in expected cash flows. An impairment loss is recognized to the extent that the carrying amount exceeds the reporting unit’s fair value, not to exceed the carrying amount of goodwill. We have the option to first assess qualitative factors to determine whether events or circumstances indicate that it is more likely than not that the fair value of a reporting unit is less than its carrying amount and determine whether further action is needed. If, after assessing the totality of events or circumstances, we determine it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then performing the quantitative impairment test is unnecessary. During the year ended December 31, 2022, we fully impaired our goodwill for our continuing operations. In addition, we recorded impairment charges attributable to goodwill of the Disposal Group during the year ended December 31, 2022 (see Note 15). Fair Value of Financial Instruments ASC 820, Fair Value Measurements and Disclosures ● Level 1 – Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; ● Level 2 – Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability; ● Level 3 – Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity). The fair value of financial instruments is the amount at which the instrument could be exchanged in a current transaction between willing parties. The carrying values of financial instruments such as accounts receivable, accounts payable and accrued liabilities approximate fair value due to short-term nature of these instruments. Fair Value Option The fair value option provides an election that allows an entity to irrevocably elect to record certain financial assets and liabilities at fair value on an instrument-by-instrument basis at initial recognition. We have elected to apply the fair value option to our 2021 Senior Secured Convertible Notes (the “Senior Convertible Notes”) due to the complexity of the various conversion and settlement options available to both the holders of such notes and Akerna. The Senior Convertible Notes accounted for under the fair value option election are each a debt host financial instrument containing embedded features that would otherwise be required to be bifurcated from the debt-host and recognized as separate derivative liabilities subject to initial and subsequent periodic estimated fair value measurements in accordance with GAAP. Notwithstanding, when the fair value option election is applied to financial liabilities, bifurcation of an embedded derivative is not required, and the financial liability is initially measured at its issue-date estimated fair value and then subsequently remeasured at estimated fair value on a recurring basis as of each reporting period date. The portion of the change in fair value attributed to a change in the instrument-specific credit risk is recognized as a component of other comprehensive income (loss) within stockholders’ equity (deficit) and the remaining amount of the fair value adjustment is recognized as other income (expense) in our consolidated statement of operations. The estimated fair value adjustment is presented in a respective single line item within other income (expense) in the accompanying consolidated statement of operations because the change in fair value of the convertible notes was not attributable to instrument-specific credit risk. 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 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 our capital structure. Warrants that are indexed to our Common Stock while we meet certain other conditions with respect to our capital structure, including the ability to satisfy the warrant settlement obligations with a sufficient number of registered shares, do not qualify as derivatives and are classified as components of equity. Certain of the warrants sold by MTech in its initial public offering that were converted to Akerna warrants in connection with the Formation Mergers (the “Private Warrants”) are not indexed to our Common Stock in the manner contemplated as described herein. As a result, the Private Warrants are precluded from equity classification and are recorded as derivative liabilities. At the end of each reporting period, changes in fair value during the period are recognized within the condensed consolidated statements of operations. We will continue to adjust this derivative liability for changes in the fair value until the earlier of (a) the exercise or expiration of the Private Warrants or (b) the redemption of the Private Warrants, at which time they will be reclassified to Additional paid-in capital. As of December 31, 2023 and 2022, all of our other outstanding warrants, including certain other MTech warrants that were converted to Akerna warrants upon our formation (the “2019 Public Warrants”), are classified within stockholders’ equity (deficit). Revenue Recognition We recognize revenue when a customer obtains the benefit of promised services, in an amount that reflects the consideration that 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. Sales taxes collected from customers and remitted to government authorities are excluded from revenue. Software Revenue 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. Other Revenue. Cost of Revenue. Unbilled Receivables. Deferred Revenue Legal and Other Contingencies From time to time, we may be a party to litigation and subject to claims incident to the ordinary course of business, including intellectual property claims, labor and employment claims, breach of contract claims and other asserted and unasserted claims. We investigate these claims as they arise and 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. Stock-Based Compensation We measured stock-based compensation based on the fair value of the share-based awards on the date of grant and recognize the related costs on a straight-line basis over the requisite service period, which is generally the vesting period. Stock-based compensation expense is included in operating expenses and cost of sales of our continuing and discontinued operations in our consolidated statements of operations consistent with the allocation of other compensation arrangements. In addition, stock-based compensation costs attributable to certain employees engaged in developing software are capitalized in connection with other compensation costs to the extent the underlying projects meet the criteria for capitalized software development costs. During 2022, we capitalized less than $0.1 million of stock-based compensation and no amounts were capitalized during 2023. Income Taxes Income taxes are accounted for using the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax basis of other assets and liabilities. We provide for income taxes at the current and future enacted tax rates and laws applicable in each taxing jurisdiction. We use a two-step approach for recognizing and measuring tax benefits taken or expected to be taken in a tax return and disclosures regarding uncertainties in income tax positions. We recognize interest and penalties related to income tax matters in selling, general and administrative expenses in the consolidated statement of operations. We recognize deferred tax assets to the extent that our assets are more likely than not to be realized. In making such a determination, we consider all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies, and results of recent operations. If we determine that we would be able to realize our deferred tax assets in the future in excess of its net recorded amount, we will make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes. As of December 31, 2023 and 2022, management has applied a valuation allowance to deferred tax assets when it is determined that the benefit from the deferred tax asset will not be able to be utilized in a future period. Segments We operate our business as one operating segment. Operating segments are defined as components of an enterprise about which separate financial information is evaluated by the chief operating decision maker (“CODM”), our Chief Executive Officer, for purposes of allocating resources and assessing financial performance. Our CODM allocates resources and assesses performance based upon discrete financial information at the consolidated level. Discontinued Operations In accordance with GAAP, we assess our business units that we may, from time to time, consider for disposal by sale or other means (i.e., abandonment). Those business units, which may be in the form of legal entities, divisions, product lines or asset and liability groups, among others, for which cash flows can be reasonably identified, that meet certain criteria are considered discontinued operations. Accordingly, their results of operations are presented in our statements of operations as “discontinued operations” and their associated assets and liabilities are considered “discontinued,” as appropriate on our consolidated balance sheets. Subsequent Events Management has evaluated all of our activities through the issuance date of our consolidated financial statements and has concluded that, with the exception of the completion of the Sale Transaction and the Merger in February 2024, as disclosed in detail in Note 4, no other subsequent events have occurred that would require recognition and disclosure in our consolidated financial statements or disclosure in the notes thereto. Adoption of Recent Accounting Pronouncements The FASB issued ASU No. 2016-13, Measurement of Credit Losses on Financial Instruments |
Change in Control
Change in Control | 12 Months Ended |
Dec. 31, 2023 | |
Change in Control [Abstract] | |
Change in Control | Note 4 – Change in Control We effectuated a change in control with the closing of the Sale Transaction and the Merger on February 9, 2024. The following describes the transactions and related corporate actions that facilitated the completion of these transactions. Sale Transaction On January 27, 2023, we entered into a securities purchase agreement (the “Initial SPA”) with a third party to sell MJF and Ample for $4.0 million in cash. Subsequently, we received a superior offer from Alleaves Inc. (“Alleaves”), as described below, which was presented to the third party for an opportunity to match or exceed Alleaves’ offer in accordance with the Initial SPA. The third party ultimately declined to present a counter-offer and on April 5, 2023, we terminated the Initial SPA. As a result of the termination, Akerna paid a termination fee and reimbursement for expenses of $0.2 million in June 2023. These costs were included in the line item “Other expense, net” in our consolidated statements of operations. On April 28, 2023, we entered into a securities purchase agreement (the “SPA”) with MJ Freeway Acquisition Co (“MJ Acquisition”), an affiliate of Alleaves. Upon the terms and subject to the satisfaction of the conditions described in the SPA, including approval of the transaction by Akerna’s stockholders, Akerna would sell MJF and Ample to MJ Acquisition for a purchase price of $5.0 million, consisting of $4.0 million in cash at closing and a loan by MJ Acquisition to Akerna in the principal amount of $1.0 million evidenced by a note (the “MJA Note”) and security documents with such note to be deemed paid in full upon closing. The SPA was amended on October 12, 2023, November 15, 2023 and December 28, 2023 to facilitate the following, among other administrative matters attributable to the Sale Transaction: (i) reduced the cash to be paid at closing to $1.85 million from the original $4.0 million, (ii) required Akerna to sell Ample in an unrelated transaction to an unaffiliated third party (see Note 15) with the sales proceeds from such sale, less an allowance for legal fees, to further reduce the proceeds to be received from MJ Acquisition upon closing of the Sale Transaction, (iii) provided for an additional $0.650 million from MJ Acquisition to Akerna for working capital purposes and (iv) amending the MJA Note (the “Amended and Restated Secured Promissory Note”) to increase the principal to $1.650 million and adjust for its settlement at closing such that in would be converted into a number of shares of Common Stock upon closing equivalent to $1.650 million divided by the 5-day volume weighted average price of Akerna’s Common Stock. At a special meeting held on January 29, 2024 (the “Special Meeting”), the stockholders of Akerna approved the Sale Transaction. In order to consummate the Merger and Sale Transaction, pursuant to the terms of the SPA, as amended, the Company also entered into a release and termination agreement dated February 8, 2024 (the “MJA Release and Termination Agreement”) with MJ Acquisition to obtain a release under and termination of the Second Amended and Restated Security and Pledge Agreement dated November 15, 2023 entered into by and among the Company, certain of its subsidiaries, and MJ Acquisition under the Second Amended and Restated Intellectual Property Security Agreement dated November 15, 2023 by and between the Company, certain of its subsidiaries and MJ Acquisition and under the Second Amended and Restated Guaranty dated November 15, 2023, by and between certain subsidiaries of the Company and MJ Acquisition (the “MJA Credit Agreements”). Pursuant to the MJA Release and Termination Agreement, MJ Acquisition released the Company and its subsidiaries from all of the security interests and guarantees set forth in the MJA Credit Agreements and agreed that, upon receipt by MJ Acquisition of the assignment of the membership interests of MJF and the shares of Common Stock to be issued to MJ Acquisition upon conversion of the Amended and Restated Secured Promissory Note held by MJ Acquisition into shares of Common Stock, the MJA Credit Agreements would terminate without any further action by MJ Acquisition. On February 9, 2024, we closed the Sale Transaction pursuant to the SPA, as amended. Upon the terms and subject to the satisfaction of the conditions described therein, Akerna sold to MJ Acquisition all of the membership interests in MJF for an aggregate purchase price of approximately $1.284 million and conversion of the Amended and Restated Secured Promissory Note in the amount of $1.650 million which principal amount converted into shares of Common Stock of Akerna at closing of the Sale Transaction, with such Amended and Restated Secured Promissory Note deemed paid in full upon closing of the Sale Transaction. Merger On January 27, 2023, we entered into the Merger Agreement with Gryphon. Concurrent with the signing and in support of the Merger, we and each of the holders of the Senior Convertible Notes entered into exchange agreements (the “Exchange Agreements”) whereby the holders would ultimately convert the principal amounts of each of their note holdings to a level that would represent 19.9 percent of the outstanding shares of Common Stock prior to the closing of the Sale Transaction and the Merger. Prior to the stockholder vote required for the closing of those transaction, the remaining Senior Convertible Notes outstanding would be converted into a special class of exchangeable preferred stock to facilitate the required stockholder vote and then be converted into shares of our Common Stock subject to the Merger. For a limited period, the conversion price of the Senior Convertible Notes was lowered to $24.00 per share from $95.00 per share. In accordance with the Exchange Agreements and upon the occurrence of an any additional capital raising transaction, the conversion price would be adjusted accordingly. In connection with an equity offering in June 2023 (see Note 11), the conversion price was further reduced to $10.00 per share. Through December 6, 2023, a total of $3.187 million in principal amount of the Senior Convertible Notes were exchanged for 237,213 shares of Common Stock in connection with the Exchange Agreements. On December 14, 2023, we designated and authorized 3,244 shares of Series C Preferred Stock with a par value of $1,000 per share (“Series C Preferred Stock”). Each share of the Series C Preferred Stock would have voting power equivalent to 100 shares of Common Stock. On December 20, 2023, Akerna and the holders of the Senior Convertible Notes that were parties to the Exchange Agreements entered into an amendment no. 1 to each of their respective the Exchange Agreements (the “Amended Exchange Agreements”) to establish the initial closing at which time each of the holders of the Senior Convertible Notes received 1,711 shares of Series C Preferred Stock (3,422 shares in total) in exchange for $1.711 million in principal amount of the Senior Convertible Notes ($3.422 million on a combined basis). At the Special Meeting, the stockholders of Akerna approved the Merger concurrent with approval by Gryphon’s stockholders. In addition, the stockholders of Akerna approved: (i) an amendment to the Company’s amended and restated certificate of incorporation, as amended, to effect a reverse stock split of the Company’s Common Stock, at a ratio of one (1) new share for every fifteen (15) to one hundred (100) shares of outstanding Common Stock, with the exact ratio and effective time of the reverse stock split of Akerna Common Stock to be determined by the Akerna board of directors, agreed to by Gryphon and publicly announced by press release, (ii) an increase to the number of authorized shares of Common Stock to facilitate the closing of the Merger, (iii) approval of an amendment to the amended and restated certificate of incorporation to change the corporate name from “Akerna Corp.” to “Gryphon Digital Mining, Inc.,” (iv) approval of the Akerna 2024 Omnibus Incentive Plan and (v) approval of the issuance of Common Stock upon the conversion of $1.650 million in principal amount of the Amended and Restated Secured Promissory Note held by MJ Acquisition. On February 8, 2024, we entered into amendment no. 2 (“Amendment No. 2”) to the Exchange Agreements. Pursuant to Amendment No. 2, the Company and the holders of the Senior Convertible Notes amended the terms of the Exchange Agreements to (i) set the “Final Closing Date” under the Exchange Agreement to conduct the “Final Exchange” to take place immediately following the Effective Date of the Merger, (ii) agree that the “Company Optional Redemption Price” of the Senior Convertible Notes in relation to the “Cash Sweep” was $nil, (iii) agree as to the principal amount of the Senior Convertible Note remaining outstanding held by each holder following the payment of portion of the Senior Convertible Note pursuant to the Cash Sweep and that such Senior Convertible Note will be exchanged at the Final Closing into shares of Common Stock based on a per share price of $4.60 (being $0.23, as adjusted to reflect the 1-for-20 reverse stock split to be effected immediately prior to the Final Closing), (iv) agree that such number of shares of Common Stock will not exceed the “Maximum Percentage” and therefore there will be no “Abeyance Shares”, and (v) the Final Exchange shall be consummated pursuant to Section 3(a)(9) of the Securities Act and the terms set forth in Amendment No. 2. Pursuant to the terms of Amendment No. 2, on February 9, 2024, the remaining principal amount of Senior Convertible Notes was exchanged for 824,977 shares of Common Stock. On February 8, 2024, we entered into certain exchange agreements under Section 3(a)(9) of the United States Securities Act of 1933, as amended (the “Securities Act”), in relation to the exchange of the Company’s issued and outstanding shares of Series C Preferred Stock for shares of Common Stock (the “3(a)(9) Exchange Agreements”). Pursuant to the Section 3(a)(9) Exchange Agreements, on February 9, 2024, all 3,244 Series C Shares with a face value of $1,000 per share were exchanged for 756,746 shares of Common Stock. In order to consummate the Merger and the Sale Transaction, pursuant to the terms of the Exchange Agreements, we entered into a release and termination agreement dated February 8, 2024 (“Release and Termination Agreement”), to obtain a release under, and termination of, the Amended and Restated Security and Pledge Agreement dated October 5, 2021 entered into by and among the Company, certain of its subsidiaries, and the collateral agent named therein, the Amended and Restated Intellectual Property Security Agreement dated October 5, 2021 by and between the Company, certain of its subsidiaries and the collateral agent named therein, and the Amended and Restated Guaranty dated October 5, 2021 by and between certain subsidiaries of the Company and the collateral agent named therein (collectively, the “Credit Agreements”). Pursuant to the Release and Termination Agreement, the collateral agent released the Company and its subsidiaries from all of the security interests and guarantees set forth in the Credit Agreements and agreed that, upon receipt by the holders of the Senior Convertible Notes of (i) the shares of Common Stock to be issued pursuant to Amendment No. 2 and (ii) evidence of the receipt of assignment of a stated monetary interest in the Company’s Employee Retention Tax Credit (“ERTC”) to the holders of the Senior Convertible Notes (who were also holders of the Series C Shares), the Credit Agreements would terminate without any further action by the collateral agent or the holders of the Senior Convertible Notes. Further, we entered into a separate consent and agreement dated February 8, 2024 with each of the two institutions that hold the Senior Convertible Notes, pursuant to which each such holder separately consented to the Release and Termination Agreement (the “Noteholder Consents”). On February 8, 2024, we entered into a ERTC & Liability Assignment Agreement (the “ERTC Agreement”) with Distributionco LLC, a Colorado limited liability company (“Distributionco”). Pursuant to the ERTC Agreement, in order to (i) induce the holders of the Senior Convertible Notes and Series C Shares to agree to the closing of the Merger and Sale Transaction, (ii) settle certain accounts payable to a third party service provider and (iii) settle certain amounts of compensation due and payable to officers of the Company, the Company agreed to the assignment of the Company ERTC credit anticipated to be approximately $2.1 million to Distributionco in exchange for Distributionco assuming the above liabilities of the Company totaling in the aggregate, $2.1 million of liabilities. On February 8, 2024, we entered into share settlement agreements (the “Share Settlement Agreements”) with certain former officers of the Company (the “Purchasers”), pursuant to which the Purchasers were issued shares of Common Stock as satisfaction for outstanding compensation balances owed to the Purchasers. On February 9, 2024, an aggregate of 446,611 shares of Common Stock (the “Settlement Shares”) were issued to the Purchasers pursuant to the terms of the Share Settlement Agreements. In order to induce the Purchasers to execute and deliver the Share Settlement Agreements, we agreed to provide certain registration rights under the Securities Act and applicable state securities laws with respect to the Settlement Shares, pursuant to registration rights agreements (the “Registration Rights Agreements”), dated February 8, 2024, between the Company and each of the Purchasers. In connection with the consummation of the Merger, all of Akerna’s special voting preferred stock and exchangeable shares and common stock warrants (see Note 11) as well as all unvested restricted stock awards (see Note 12) that remained outstanding immediately prior to the Merger were converted to Common Stock. On February 9, 2024, the Company completed the transactions contemplated by the Merger Agreement, as amended. Under the terms of the Merger Agreement, Merger Sub merged with and into Gryphon, with Gryphon surviving as a wholly-owned subsidiary of Akerna. On the Effective Date of the Merger, each share of Gryphon’s common stock, par value $0.0001 per share (the “Gryphon Common Stock”), and Gryphon’s preferred stock, par value $0.0001 per share (the “Gryphon Preferred Stock,” collectively referred to herein with the Gryphon Common Stock as the “Gryphon Shares”), outstanding immediately prior to the Effective Date was converted into the right to receive approximately 1.7273744 shares of Gryphon Common Stock. Each warrant to purchase common stock of Gryphon that was issued and outstanding at the Effective Date will remain issued and outstanding, and was assumed by the Company and is exercisable for shares of Common Stock pursuant to its existing terms and conditions as adjusted to reflect the ratio of exchange of Gryphon Shares for shares of Common Stock. Immediately after giving effect to the Merger, the Company had 38,733,554 shares of Common Stock outstanding and warrants to purchase Common Stock outstanding and exercisable to acquire shares of Common Stock. On February 9, 2024, the Common Stock began trading on the Nasdaq under the symbol “GRYP.” |
Revenue and Contracts with Cust
Revenue and Contracts with Customers | 12 Months Ended |
Dec. 31, 2023 | |
Revenue and Contracts with Customers [Abstract] | |
Revenue and Contracts with Customers | Note 5 – Revenue and Contracts with Customers We derive the majority of our revenue from subscription fees paid for access to and usage of our SaaS solutions for a specified period of time, typically one to three years. In addition to subscription fees, contracts with customers may include implementation fees for launch assistance and training. Fixed subscription and implementation fees are billed in advance of the subscription term and are due in accordance with contract terms, which generally provide for payment within 30 days. Our contracts typically have a one to three year term. Our contractual arrangements include performance, termination and cancellation provisions, but do not provide for refunds. Customers do not have the contractual right to take possession of the Company’s software at any time. The following table summarizes our revenue disaggregation by customer type for the following periods: For the Years Ended 2023 2022 Government $ 2,564,846 $ 3,357,978 Non-government 4,271,598 7,100,192 $ 6,836,444 $ 10,458,170 Accounts Receivable from Customers Our accounts receivable from customers, net of an allowance for expected credit losses, were $147,855 and $429,949 as of December 31, 2023 and 2022 including $219,912, or 51 percent, as of December 31, 2022 attributable to two government clients. There were no amounts receivable from government clients as of December 31, 2023. The allowance for expected credit losses was comprised of the following activity: For the Years Ended December 31, 2023 2022 Allowance for expected credit losses at beginning of period $ 331,262 $ 305,517 Bad debt expense (1) 63,358 415,009 Write-off uncollectable accounts (377,148 ) (389,264 ) Allowance for expected credit losses at end of period $ 17,472 $ 331,262 (1) Bad debt expense is recognized as a component of General and administrative expenses. Includes amounts attributable to unbilled accounts receivable (see Note 7). 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 our solutions. We evaluate such contracts to determine whether the services to be provided are distinct and accordingly should be accounted for as separate performance obligations. If we determine that a contract has multiple performance obligations, the transaction price, which is the total price of the contract, is allocated to each performance obligation based on a relative standalone selling price method. We estimate standalone selling price based on observable prices in past transactions for which the product offering subject to the performance obligation has been sold separately. As the performance obligations are satisfied, revenue is recognized as discussed above in the product descriptions. Transaction Price Allocated to Future Performance Obligations As many of the contracts we have 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 December 31, 2023 are part of a contract that has an original expected duration of one year or less. For contracts with an original expected duration of greater than one year, for which the practical expedient does not apply, the aggregate transaction price allocated to the unsatisfied performance obligations was $2.5 million as of December 31, 2023, of which $2.4 million is expected to be recognized as revenue over the next twelve months. 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 year. Deferred revenue is included in the accompanying consolidated balance sheets under Total current liabilities, net of any long-term portion that is included in noncurrent liabilities. The following table summarizes deferred revenue activity for the year ended December 31, 2023: Beginning of Net Revenue End of Deferred revenue - 2023 $ 730,574 2,802,913 3,133,835 $ 399,652 Deferred revenue - 2022 1,040,010 5,446,403 5,755,839 730,574 Of the $6.8 million and $10.5 million of revenue recognized during the years ended December 31, 2023 and 2022, $0.5 million and $1.2 million was included in deferred revenue as of December 31, 2022 and 2021, respectively. 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 year based on the estimated customer relationship period. The following table summarizes deferred contract cost activity for the year ended December 31, 2023: Beginning of Additions Amortized End of Deferred contract costs - 2023 $ 36,465 — 36,465 $ — Deferred contract costs - 2022 142,930 124,690 231,155 36,465 (1) Includes contract costs amortized to Sales and marketing expense during the period. |
Fixed Assets, Net and Other Non
Fixed Assets, Net and Other Noncurrent Assets | 12 Months Ended |
Dec. 31, 2023 | |
Fixed Assets, Net and Other Noncurrent Assets [Asbtract] | |
Fixed Assets, net and Other Noncurrent Assets | Note 6 – Fixed Assets, net and Other Noncurrent Assets Fixed assets consisted of the following: As of December 31, 2023 2022 Furniture and computer equipment $ 80,759 $ 154,137 Less: accumulated depreciation (59,070 ) (105,257 ) Fixed assets, net $ 21,689 $ 48,880 Depreciation expense related to our fixed assets for the years ended December 31, 2023 and 2022, was $27,883 and $44,841, respectively. During the year ended December 31, 2023, we disposed of certain fixed assets that were fully depreciated. Other Noncurrent Assets At the beginning of 2022, we had $28.7 million of noncurrent assets attributable to our continuing operations including capitalized software of $6.1 million, intangible assets of $3.9 million and goodwill of $18.7 million. During 2022, incurred $2.2 million of capitalized software additions and recorded amortization of $4.4 million of which $0.7 million was attributable to capitalized software and $3.7 million was attributable to intangible assets. In connection with our strategic shift during 2022, we incurred impairment charges of $26.5 million of which $4.6 million was attributable to capitalized software, $3.2 million to intangible assets and $18.7 million to goodwill. Of this total, $3.0 million was attributable to MJF, $2.1 million to Trellis, $14.4 million to Solo and $7.0 million to Viridian. |
Supplemental Balance Sheet Disc
Supplemental Balance Sheet Disclosures | 12 Months Ended |
Dec. 31, 2023 | |
Fixed Assets, Net and Other Noncurrent Assets [Asbtract] | |
Supplemental Balance Sheet Disclosures | Note 7 – Supplemental Balance Sheet Disclosures Prepaid expenses and other current assets consisted of the following: As of December 31, 2023 2022 Software and technology $ 27,518 $ 309,466 Professional services, dues and subscriptions 4,723 18,268 Insurance — 168,935 Deferred contract costs — 36,465 Unbilled receivable 370,326 534,925 Other 17,515 53,704 Total prepaid expenses and other current assets $ 420,082 $ 1,121,763 Accounts payable, accrued expenses and other current liabilities consisted of the following: As of December 31, 2023 2022 Accounts payable $ 2,165,342 $ 1,417,835 Professional fees 1,041,699 143,749 Sales taxes 107,923 63,983 Compensation 397,754 334,514 Contractors 160,739 521,145 Settlements and legal 248,031 934,396 Interest 699,142 597,873 Other — 9,688 Total accounts payable, accrued expenses and other current liabilities $ 4,820,630 $ 4,023,183 |
Long Term Debt
Long Term Debt | 12 Months Ended |
Dec. 31, 2023 | |
Long Term Debt [Abstract] | |
Long Term Debt | Note 8 – Long Term Debt Long-term debt consisted of the following: As of December 31, 2023 2022 Total long-term debt $ 5,149,000 $ 14,607,000 Less: current maturities (5,149,000 ) (13,200,000 ) Total long-term debt, less current portion $ — $ 1,407,000 Senior Convertible Notes On October 5, 2021, we entered into a securities purchase agreement (the “2021 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 pay off and retire convertible notes that were issued in 2020 and fund acquisitions and continued investment in our technology infrastructure. The Senior Convertible Notes rank senior to all our other and future indebtedness. The Senior Convertible Notes had a maturity date of October 4, 2024 and could be repaid in shares of Common Stock or cash. The Senior Convertible Notes were convertible into shares of Common Stock at a conversion price of $95.00 per share effective October 4, 2022 which represented an adjustment, as required by the 2021 SPA, from $124.20 per share as a result of the offering of convertible redeemable preferred stock on that date (see Note 11). In connection with the Exchange Agreements that were entered into in January 2023, the conversion price of the Senior Convertible Notes was lowered to $24.00 from $95.00 per share through June 14, 2023 at which time it was further reduced to $10.00 per share due to the offering of Common Stock in connection with a private placement transaction (see Note 11). In connection with the 2021 SPA and the Senior Convertible Notes, we and certain of our subsidiaries entered into the Credit Agreements 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 Credit Agreements created 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. In order to consummate the Merger and the Sale Transaction, we entered into the Release and Termination Agreement, to obtain a release under, and termination of the Credit Agreements. The Company and its subsidiaries were released from the Credit Agreements on February 9, 2024 upon receipt by the holders of the Senior Convertible Notes of (i) the shares of Common Stock issued pursuant to Amendment No. 2 to the Exchange Agreements and (ii) assignment of interests by the holders of the Senior Convertible Notes (who were also holders of the Series C Shares) in the Company’s ERTC. At that time, the Credit Agreements were deemed terminated and the Senior Convertible Notes were deemed settled in full. Method of Accounting and Activity During the Periods for the Senior Convertible Notes Upon the date that they were issued, we made an irrevocable election to apply the fair value option to account for the Senior Convertible Notes. Disclosures, including assumptions used to determine the fair values, are provided in Note 13. During the year ended December 31, 2023 we made $11.5 million in principal settlements on the Senior Convertible Notes, of which $4.9 million was settled in cash, $3.2 million was settled in 237,213 shares of Common Stock and the remaining $3.4 million was settled in 3,422 shares of Series C Preferred Stock. During the year ended December 31, 2022, we made $5.3 million in principal settlements on the Senior Convertible Notes, of which $1.4 million was settled in cash and the remaining $3.9 million was settled in 10,371 shares of Common Stock. During the year ended December 31, 2023, the fair value of the Senior Convertible Notes increased by $0.4 million. Of the adjustment, an increase of less than $0.1 million resulted from instrument-specific credit risk and was recognized as other comprehensive loss and accumulated in stockholders’ equity (deficit) and an increase of $0.4 million was recognized in our consolidated statement of operations as a change in fair value of convertible notes. During the year ended December 31, 2022, the fair value of the Senior Convertible Notes increased by $2.7 million. Of the adjustment, a decrease of $0.2 million resulted from instrument-specific credit risk and was recognized as other comprehensive income and accumulated in stockholders’ equity (deficit) and an increase of $2.9 million was recognized in our consolidated statement of operations as a change in fair value of convertible notes. As of December 31, 2023 and 2022, the fair values of the Senior Convertible Notes on our consolidated balance sheet were $3.5 million and $14.6 million, respectively. Amended and Restated Secured Promissory Note On May 3, 2023, we received $1.0 million of proceeds from MJ Acquisition in connection with the issuance of the MJA Note which, after receipt of an additional $0.650 million in proceeds in connection with certain amendments, was restated in the form of the Amended and Restated Secured Promissory Note. The Amended and Restated Secured Promissory Note provided for simple interest at the rate of ten percent (10%) per annum from the date of issuance through the completion of the Sale Transaction. Upon closing of the Sale Transaction, the Amended and Restated Secured Promissory Note was required to be converted into a number of shares of Common Stock with value equivalent to the principal amount outstanding. We have elected not to apply the fair value option to this note. In connection with the Amended and Restated Secured Promissory Note, we entered into the MJA Credit Agreements that, among other items, provided for the security and pledge of certain collateral and the guarantee by certain subsidiaries of the Company for obligations under the Amended and Restated Secured Promissory Note. Furthermore, we, MJ Acquisition, the Collateral Agent for the Senior Convertible Notes and the holders of the Senior Convertible Notes entered into certain subordination and intercreditor agreements that provided for the issuance of the Amended and Restated Secured Promissory Note and its priority as junior to the Senior Convertible Notes with respect to security and ultimate settlements. Upon completion of the Merger and the Sale Transaction, the MJA Release and Termination Agreement released the Company and its subsidiaries from all of the security interests and guarantees set forth in the MJA Credit Agreements and on February 9, 2024, the entire $1.650 million principal amount was converted into shares of Common Stock and all accrued interest was forgiven with such Amended and Restated Secured Promissory Note being deemed paid in full. Maturities of Debt Maturities of our debt as of December 31, 2023 are presented below. Maturities due for the Senior Convertible Notes during 2024 $ 3,136,271 Maturities due for the Amended and Restated Secured Promissory Note during 2024 1,650,000 Original issue discount of the Senior Convertible Notes (2,000,000 ) Cumulative unrealized change in fair value of the Senior Convertible Notes 2,362,729 Total debt outstanding $ 5,149,000 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2023 | |
Income Taxes [Abstract] | |
Income Taxes | Note 9 – Income Taxes The following table sets forth the expense or (benefit) for income taxes: Year Ended December 31, 2023 2022 Current income tax expense (benefit) U.S. federal $ — $ (50,000 ) U.S. state — 2,826 Foreign — — Total current income taxes — (47,174 ) Deferred income tax benefit U.S. federal $ — $ (653,945 ) U.S. state — — Total deferred income benefit — (653,945 ) Total income tax benefit $ — $ (701,119 ) The following table sets forth reconciliations of the income tax expense at the statutory federal income tax rate to actual expense based on our loss before income taxes: Year Ended December 31, 2023 2022 Income tax expense (benefit) attributable to: Federal $ (2,406,564 ) $ (16,749,778 ) State, net of federal benefit (252,836 ) (853,392 ) Foreign tax rate differential (76,018 ) (11,543 ) Transaction costs 167,137 — Other permanent differences 207,525 472,270 Goodwill impairment 358,744 9,172,756 Rate changes (51,003 ) (992 ) Changes in valuation allowance (3,591,436 ) 7,501,917 Provision to return adjustment 486,727 62,788 Deferred impact of subsidiary sales 5,157,724 (247,839 ) Other adjustments — (47,306 ) Effective income tax expense (benefit) $ — $ (701,119 ) The following table sets forth our deferred income tax assets and liabilities: As of December 31, 2023 2022 Noncurrent deferred tax assets: Employee compensation $ 63,091 $ 136,154 Debt issuance costs — 39,381 Revenue recognition — 64,662 Settlement accrual 49,575 178,549 Fixed assets 171,268 774,936 Section 174 capitalization 1,219,926 1,121,311 Federal and state net operating loss 14,226,635 13,860,338 Foreign net operating loss 56,739 4,641,293 Other 4,718 280,430 Total deferred tax assets $ 15,791,952 $ 21,097,054 Noncurrent deferred tax liabilities: Intangible assets — (1,713,666 ) Total deferred tax liabilities $ — $ (1,713,666 ) Valuation allowance (15,791,952 ) (19,383,388 ) Deferred tax asset (liability), net after valuation allowance $ — $ — During the year ended December 31, 2023, valuation allowances on deferred tax assets that are not anticipated to be realized decreased by $3.6 million which was recorded to deferred expense. During the year ended December 31, 2022, valuation allowances on deferred tax assets that were not anticipated to be realized increased by $7.5 million, substantially all of which was recorded to deferred expense while an insignificant portion was recorded in final purchase accounting. Our deferred tax valuation allowances are primarily the result of uncertainties regarding the future realization of recorded tax benefits on tax losses. The measurement of deferred tax assets is reduced by a valuation allowance if, based upon available evidence, it is more likely than not that the deferred tax assets will not be realized. We have evaluated the realizability of our deferred tax assets in each jurisdiction by assessing the adequacy of expected taxable income, including the reversal of existing temporary differences, historical and projected operating results, and the availability of prudent and feasible tax planning strategies. Based on this analysis, we have determined that the valuation allowances recorded as of December 31, 2023 and December 31, 2022 are appropriate. We have deferred tax assets related to U.S. federal tax and state tax carryforwards for net operating losses (“NOL”) in the amount of $59.5 million. The majority of U.S. federal NOL carryforwards are carried forward indefinitely. Federal NOLs generated after 2017 have an indefinite carryforward and are only available to offset 80 percent of taxable income beginning in 2021. U.S. state NOL carryforwards expire at various dates of which the majority begin to expire in 2039. We have deferred tax assets related to foreign NOL carryforwards, which begin to expire in 2034, in the amount of $0.2 million. We are not currently under examination for any of the major jurisdictions where we conduct business as of December 31, 2023; however, all of our tax years remain subject to examination. Our management does not believe there are significant uncertain tax positions in 2023 and as a result we do not expect any cash payments in the next 12 months. A reserve for potential penalties for $0.1 million that was established in 2021 was reversed in 2022 as a result of the Internal Revenue Service’s dismissal of the matters. There was no interest related to uncertain tax positions in 2023 or 2022. We did not pay any income taxes during the year ended December 31, 2023 and we paid less than $0.1 million for income taxes, net of refunds received, in certain state and national jurisdictions during the year ended December 31, 2022. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2023 | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | Note 10 – Commitments and Contingencies Litigation On May 15 and May 23, 2023, Akerna and all its directors were named in two derivative lawsuits (McCaffrey v. Akerna et al. and Caller v. Akerna et al., Nos. 1:23-cv-01213-PAB and 1:23-cv-01300-KLM, respectively) filed in the United States District Court for the District of Colorado by stockholders Albert McCaffrey and Israel Caller, respectively, alleging that the disclosures made regarding the transactions with Gryphon and MJ Acquisition violated Sections 14(a) and 20(a) of the Securities and Exchange Act of 1934. The lawsuits contended that the disclosures omitted material information regarding the transactions and seek injunctive relief and attorneys’ fees. The two actions were dismissed without prejudice on October 3, 2023 (Caller) and October 11, 2023 (McCaffrey). On January 13, 2023, Courier Plus Inc. d/b/a Dutchie (“Dutchie”) filed a complaint in the Court of Common Pleas, Dauphin County, Commonwealth of Pennsylvania against Akerna and MJF alleging unfair competition, tortious interference, and unjust enrichment with respect to MJF’s exclusive government contract with the Commonwealth of Pennsylvania. We filed a preliminary objection alleging serious defects, such as jurisdiction. The parties attended a hearing in July 2023. In October 2023, the courts dismissed the case but left some items available in the complaint for an appeal. Dutchie has amended its complaint and filed again. We filed another preliminary objection to their amended complaint. A hearing on A hearing on our preliminary objections is scheduled for April 9, 2024. Before and throughout this dispute, we have worked with the Commonwealth of Pennsylvania to ensure continued compliance with our contract. We intend to continue to defend our position vigorously and, at this time, do not believe an estimate of potential loss, if any, is appropriate. While this suit is attributable to the operations of MJF, Gryphon, as successor to Akerna, remains contingently liable as Akerna has been named in addition to MJF. On April 2, 2021, TreCom Systems Group, Inc. (“TreCom”) filed suit against Akerna and MJF in federal District Court for the Eastern District of Pennsylvania, seeking recovery of up to approximately $2.0 million for services allegedly provided pursuant to a Subcontractor Agreement between MJF and TreCom. MJF provided a notice of termination of the operative Subcontractor Agreement on August 4, 2020. MJF 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. Both parties recently filed motions for summary judgment with respect to the validity of each parties’ claims. The court has not advised the parties if it will hold a hearing on the motions or when an order is expected. As most of the material facts at issue are disputed by the parties, the court may deny both motions, in which case the matter will move towards trial. With respect to the TreCom matter, we established a loss contingency of $0.2 million in 2021 on the books of MJF which remains outstanding as of December 31, 2023. While this suit is attributable to the operations of MJF, Gryphon, as successor to Akerna, remains contingently liable as Akerna has been named in addition to MJF. As of December 31, 2023, 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. Other On January 10, 2024, Akerna received an inquiry in the form of a civil investigation demand from the United States Department of Justice (“DOJ”) with respect to the Paycheck Protection Loan (“PPP Loan”) that the Company received in connection with the CARES Act. On January 25, 2024, Akerna received a similar request from the United States Small Business Administration (“SBAJ”) in the form of a notification of loan review and request for documents. The PPP Loan was received for $2.2 million on April 21, 2020. In August 2021, we submitted our application for forgiveness and on September 2, 2021, the PPP Loan was forgiven in full by the SBA. With respect to the DOJ and SBA inquiries, we are cooperating fully and look forward to addressing the matter and uncertainties, if any, in an expeditious manner. In connection with the Sale Transaction and the Merger, we had a commitment to compensate our financial advisor for up to 3 percent of the transaction value in success fees, subject to a minimum of $1.5 million. As of December 31, 2023, a total of $0.650 million was accrued for the advisor. The ultimate disposition of this obligation has been assumed by Gryphon in connection with their plans for a post-Merger offering of securities. In addition, we were party to arrangements with our executive officers and certain other administrative employees pursuant to their employment agreements and transaction success agreements that resulted in cash payments in February 2024 for transaction success bonuses and other benefits for a total of approximately $0.2 million (collectively and not individually). Certain other costs, including the value of accelerated vesting of equity awards held by those officers, were addressed in connection with the Share Settlement Agreements (see Note 4). |
Stockholders_ Equity (Deficit)
Stockholders’ Equity (Deficit) | 12 Months Ended |
Dec. 31, 2023 | |
Equity [Abstract] | |
Stockholders’ Equity (Deficit) | Note 11 – Stockholders’ Equity (Deficit) Common and Preferred Stock We had one single class of Common Stock of which 150,000,000 shares were authorized through December 31, 2023 with a par value of $0.0001 per share. The holders of Common Stock were entitled to one vote per share on all matters submitted to a vote of stockholders of the Company. Subject to the prior rights of all classes or series of stock at the time outstanding having prior rights as to dividends or other distributions, all stockholders were entitled to share equally in dividends, if any, as may be declared from time to time by the Board of Directors out of funds legally available. Subject to the prior rights of our creditors and the holders of all classes or series of stock at the time outstanding having prior rights as to distributions upon liquidation, dissolution, or winding up of the Corporation, in the event of liquidation, the holders of Common Stock were entitled to share ratably in all assets remaining after payment of all liabilities. The stockholders did not have cumulative, preemptive rights, or subscription rights. We also had 5,000,000 authorized shares of preferred stock, $0.0001 par value per share, of which one share of special voting preferred stock (the “Special Voting Preferred Stock”) was issued and outstanding (see below). On June 14, 2023, we entered into a transaction for a private placement in our public equity (the “PIPE Investment”) whereby 50,000 shares of Common Stock were issued to an affiliate of Alleaves at $10.00 per share for total cash proceeds of $0.5 million. The proceeds from the PIPE Investment were used to finance the termination fee and related expenses of $0.2 million to a third party in accordance with the Initial SPA (see Note 4) and the remainder was allocated for ongoing operating expenses. 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 per share (the “Series A Preferred Stock”), and 100,000 shares of the Company’s Series B Convertible Redeemable Preferred Stock, par value $0.0001 per share (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 percent 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 $0.4 million for fees and offering expenses of our financial advisor. We also incurred and paid approximately $0.1 million of other issue costs attributable to third-party professional and legal fees. The aggregate net proceeds (after deducting the fees and expenses of our financial advisor) together with the additional amount to provide for the 105 percent redemption premium, or $0.5 million, on the Convertible Redeemable Preferred Stock was deposited in an account with an escrow agent. The shares of the Convertible Redeemable Preferred Stock were convertible, at a conversion price of $5.00 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. 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 20-for1 (the “Reverse Stock Split”) 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 Preferred Stock (excluding any proportion of the Special Voting Preferred Stock 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 Preferred Stock (excluding any proportion of the Special Voting Preferred Stock 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. The holders of all of the Convertible Redeemable Preferred Stock redeemed their shares for cash at 105 percent 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. The amounts paid over the offering price upon redemption are considered “deemed” dividends and reported as a reduction of Additional paid-in capital in the consolidated statement of changes in stockholders’ equity (deficit). Series C Preferred Stock On December 14, 2023, the Company designated and authorized 3,244 shares of Series C Preferred Stock with a par value of $1,000 per share. Each share of the Series C Preferred Stock would have voting power equivalent to 2,000 shares of Common Stock. On December 20, 2023, each of the holders of the Senior Convertible Notes received 1,711 shares of Series C Preferred Stock (3,422 shares in total) in exchange for $1.711 million in principal amount of the Senior Convertible Notes ($3.422 million on a combined basis). In connection with the closing of the Merger and pursuant to the Section 3(a)(9) Exchange Agreements, on February 9, 2024, all 3,244 shares of Series C Preferred Stock were exchanged for 756,746 shares of Common Stock. Special Voting Preferred Stock and Exchangeable Shares In connection with a transaction in July 2020 in which we acquired Ample in exchange for 3,294,574 shares of exchangeable shares (the “Exchangeable Shares”), we issued a single share of our Special Voting Preferred Stock for the purpose of ensuring that each Exchangeable Share is substantially the economic and voting equivalent of 1/400 of a share of Akerna Common Stock and that each Exchangeable Share was exchangeable on a 400-for-one basis for a share of Akerna Common Stock, subject to certain limitations and adjustments, including adjustments to reflect the Reverse Stock Split. Each holder of Exchangeable Shares effectively had the ability to cast votes along with holders of Akerna Common Stock. The Exchangeable Shares did not have a par value. The Special Voting Preferred Stock had a par value of $0.0001 per share and a preference in liquidation of $1.00. The Special Voting Preferred Stock entitled the holder to an aggregate number of votes equal to 1/400 of the number of the Exchangeable Shares issued and outstanding from time to time. The holder of the Special Voting Preferred Stock and the holders of shares of Akerna Common Stock would both vote together as a single class on all matters submitted to a vote of our stockholders. During the years ended December 31, 2023 and 2022, several Ample shareholders exchanged a total of 37,188 and 23,614 Exchangeable Shares with values of $0.3million and $0.2 million for 93 and 59 shares of Akerna Common Stock, respectively. 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 million of shares of our Common Stock through an “at the market” equity offering program (the “2021 ATM Program”). From its inception through September 23, 2022, a total of 5,931 shares of Common Stock with an aggregate gross purchase price of $2.7 million, including 4,540 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 million of shares of our Common Stock (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. Through December 31, 2022, we sold a total of 27,607 shares of Common Stock with an aggregate gross purchase price of $1.1 million under the 2022 ATM Program. The 2022 ATM Program was not available to us during 2023 due to certain restrictions imposed by the registration statement underlying the offering (the “Baby Shelf Limitation”). Under the Baby Shelf Limitation, we were not able to 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. 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 73,457 shares of Common Stock together with Common Stock warrants (the “Common Warrants”) to purchase up to 73,457 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 35,239 shares of Common Stock, together with Common Warrants to purchase up to 35,239 shares of Common Stock (together, the “Pre-funded Units”). The Units were sold at a public offering price of $92.00 per unit and the Pre-funded Units were sold at a public offering price of $91.96 per pre-funded unit. The Pre-Funded Warrants were exercised immediately thereafter at their nominal exercise price of $0.04 per share. The Common Warrants accompanying each of the Units and Pre-funded Units were issued separately and were immediately tradeable separately upon issuance. The Common Warrants have an exercise price of $92.00 per share subject to certain adjustments, were immediately exercisable and will expire 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 up to 5,435 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 (the “Effective Date”) and ending five The Unit Offering closed on July 5, 2022 and we received net proceeds of approximately $9.2 million after deducting underwriting discounts and commissions and related expenses including legal and other professional fees. In connection with the Convertible Notes Amendment, a total of $7.0 million of the proceeds were deposited into restricted cash accounts. We used the remaining net proceeds from the 2022 Unit Offering for general corporate purposes, including working capital, marketing, product development and capital expenditures. As of December 31, 2023, a total of 45,652,174 warrants exercisable for 114,130 shares of Common Stock remain outstanding from the 2022 Unit Offering including 43,478,261 Common Warrants exercisable for 108,696 shares of Common Stock and 108,696 Underwriter Warrants exercisable for 5,435 shares of Common Stock. In accordance with our policy, we assessed the warrants issued in connection with the 2022 Unit Offering and determined that there are no instances outside of the Company’s control that could require cash settlement. In addition, we determined that the warrants issued in connection with the 2022 Unit Offering do not meet the definition of a derivative as they are indexed to the Company’s Common Stock and they satisfy all of the additional qualifications to be classified within equity. Accordingly, the net proceeds of $9.2 million were recorded as: (i) an increase to Common Stock of $11 representing the issuance of 73,457 shares of Common Stock attributable to the Units and the issuance of 35,239 shares of Common Stock from the exercise of the Pre-funded Warrants, both at their par value of $0.0001 per share 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 including legal and other professional fees. 2019 Warrants In connection with MTech’s initial public offering, MTech sold units consisting of one share of MTech’s common stock and one warrant of MTech (“MTech Public Warrant”). Each MTech Public Warrant entitled the holder to purchase one share of MTech’s common stock. Concurrently with MTech’s initial public offering, MTech sold additional units on a private offering basis. Each of these units consisted of one share of MTech’s common stock and one warrant of MTech (“MTech Private Warrant”). Each MTech Private Warrant entitled the holder to purchase one share of MTech’s common stock. Upon completion of the Mergers between MTech and MJF on June 17, 2019, the MTech Public Warrants and the MTech Private Warrants were converted to the 2019 Public Warrants and the Private Warrants, respectively, at an exchange ratio of one-for-one to a warrant to purchase one share of Akerna’s Common Stock with identical terms and conditions. Concurrent with the Reverse Stock Split, the exchange ratio of the 2019 Public Warrants and the Private Warrants was changed to 400 warrants for one share of Common Stock. The Private Warrants have contingent exercise provisions such that when the Private Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Warrants will be redeemable by the Company. Accordingly, the requirements for accounting for the Private Warrants as equity are not satisfied and the Private Warrants have been reflected on our consolidated balance sheets as a derivative liability and are not included the summary of outstanding warrants presented below. Outstanding Warrants The following table summarizes our warrants outstanding as of the dates presented: Exercise Expiration As of Issued Exercised Expired As of 2019 Public Warrants (1) $ 4,600.00 6/19/2024 5,813,804 — — — 5,813,804 2022 Unit Offering Common Warrants (2) $ 70.36 6/29/2027 43,478,261 — — — 43,478,261 Underwriter Warrants (2) $ 70.36 6/29/2027 2,173,913 — — — 2,173,913 51,465,978 — — — 51,465,978 (1) The 2019 Public Warrants are exercisable for 14,535 shares of Common Stock at $4,600.00 per share or a ratio of 400 warrants for one share of Common Stock. (2) The Common Warrants and Underwriter Warrants are exercisable for a combined amount of 114,130 shares of Common Stock at $70.36 per share or a ratio of 400 warrants for one share of Common Stock. Upon completion of the Merger on February 9, 2024, each of the outstanding warrants to purchase Common Stock referenced in the table above were cancelled and were converted to shares of Common Stock of Gryphon. |
Stock-Based Compensation and Ot
Stock-Based Compensation and Other Benefit Plans | 12 Months Ended |
Dec. 31, 2023 | |
Stock-Based Compensation and Other Benefit Plans [Abstract] | |
Stock-Based Compensation and Other Benefit Plans | Note 12 – Stock-Based Compensation and Other Benefit Plans On June 17, 2019, our stockholders considered and approved the 2019 Long Term Incentive Plan, or the Equity Incentive Plan, and reserved an initial 1,040,038 shares of Akerna Common Stock for issuance thereunder. In June 2020 and May 2022, our stockholders approved amendments to the Equity Incentive Plan increasing the number of shares authorized for issuance thereunder by 525,000 and 2,934,962, respectively. Subsequent to these amendments, the total number of shares authorized for issuance thereunder was 4,500,000 prior to the Reverse Stock Split. After giving effect to the Reverse Stock Split and further for the reverse stock split in connection with the Merger, the adjusted number of shares authorized for issuance was 11,250. As of December 31, 2023, there were 8,714 authorized shares remaining available for issuance. The Equity Incentive Plan is administered by the compensation committee of our Board of Directors and provides for the offering of awards to employees, officers, directors and consultants in the form of restricted stock, restricted stock units, or RSUs, options, stock appreciation rights, or SARs, and other stock-based awards. Since the Formation Mergers, we have only granted RSUs that are subject to time-based vesting and require continuous employment, typically over a period of four years from the grant date or the first day of the service period. We have not granted any restricted stock, options, SARs or other stock-based awards since the Formation Mergers. Certain awards granted by MJF prior to the Formation Mergers were exchanged for and became subject to restricted stock agreements, or Restricted Shares, with varying vesting terms that reflect the vesting conditions applicable to the predecessor awards at the time of the Formation Mergers. A summary of our unvested Restricted Shares and RSUs activity is presented in the table below: Restricted Restricted Total Weighted Unvested as of December 31, 2021 81 1,709 1,790 $ 2,188.00 Granted — 707 707 270.80 Vested (64 ) (1,124 ) (1,188 ) 1,081.20 Forfeited — (739 ) (739 ) 2,248.20 Unvested as of December 31, 2022 17 553 570 $ 1,793.20 Granted — — — — Vested (17 ) (259 ) (276 ) 2,045.80 Forfeited — (113 ) (113 ) 1,372.40 Unvested as of December 31, 2023 — 181 181 $ 1,801.00 For the years ended December 31, 2023 and 2022 we recognized stock-based compensation expense related to the ratable amortization of the unvested Restricted Shares and RSUs of $0.4 million, and $0.9 million, respectively. During the year ended December 31, 2022, we capitalized less than $0.1 million in stock-based compensation costs as software development cost and no amounts were capitalized during the year ended December 31, 2023. A total of $0.3 million of unrecognized costs as of December 31, 2023 related to RSUs will be ratably recognized over an estimated weighted average remaining vesting period of 0.87 years. Employee Benefit Plan We have a 401(k) Plan (the “401(k) Plan”) to provide retirement benefits for our employees. Employees may contribute up to a portion of their annual compensation to the 401(k) Plan, limited to a maximum annual amount as updated annually by the Internal Revenue Service. We do not offer a match of employee contributions nor any discretionary contributions. |
Fair Value
Fair Value | 12 Months Ended |
Dec. 31, 2023 | |
Fair Value [Abstract] | |
Fair Value | Note 13 – Fair Value Fair Value Measurement – Contingent Consideration In connection with our acquisition of 365 Cannabis in October 2021, the 365 Cannabis selling shareholders had the potential to earn contingent consideration payable in Common Stock or cash if certain revenue criteria were met (the “Earn-out Obligation”). The fair value of the Earn-out Obligation, on the date of acquisition of 365 Cannabis was $6.3 million. The Earn-out Obligation was reduced by $3.0 million in September 2022 in connection with the finalization of the purchase accounting associated with the acquisition of 365 Cannabis. The carrying amount of the Earn-out Obligation was further reduced to its fair value of $2.3 million on December 31, 2022 in connection with the sale of 365 Cannabis that was completed in January 2023. The corresponding adjustments have been reflected in the loss from discontinued operations for the year ended December 31, 2023 (see Note 15). We value contingent consideration using a probability-weighted discounted cash flow model, which incorporates inputs that are not observable in the market and thus represents a Level 3 measurement as defined in GAAP. The unobservable inputs utilized for measuring the fair value of the contingent consideration reflect management’s own assumptions about the assumptions that market participants would use in valuing the contingent consideration as of the valuation date, as well as our knowledge of specific transactions that effect the calculation. Fair Value Option Election – Convertible Notes We elected to account for the Senior Convertible Notes by applying the fair value option. Under the fair value option, the financial liability is initially measured at its issue-date estimated fair value and subsequently remeasured at its estimated fair value on a recurring basis at each reporting period date. The change in estimated fair value resulting from changes in instrument-specific credit risk is recorded in Other comprehensive income as a component of stockholders’ equity (deficit). The remaining estimated fair value adjustment is presented as a single line item within Other income (expense) in our consolidated statement of operations under the caption, Change in fair value of convertible notes. For the Senior Secured Notes, which are measured at fair value categorized within Level 3 of the fair value hierarchy, the following is a reconciliation of the fair value from January 1, 2022 to December 31, 2023: Senior Convertible Notes Beginning fair value balance - January 1, 2022 $ 17,305,000 Principal payments in cash and Common Stock (5,337,273 ) Change in fair value reported in the statements of operations 2,884,273 Change in fair value reported in other comprehensive income (245,000 ) Ending fair value balance - December 31, 2022 $ 14,607,000 Principal payments in cash and Common Stock (11,526,457 ) Change in fair value reported in the statements of operations 370,457 Change in fair value reported in other comprehensive income 48,000 Ending fair value balance - December 31, 2023 $ 3,499,000 The estimated fair value of the Senior Convertible Notes was computed using Monte Carlo simulations, which incorporates significant inputs that are not observable in the market, and thus represents a Level 3 measurement as defined by GAAP. The unobservable inputs utilized for measuring the fair value of the Senior Convertible Notes reflect our assumptions about the assumptions that market participants would use in valuing the Senior Convertible Notes as of the issuance date and subsequent reporting periods. We determined the fair value of the Senior Convertible Notes by using the following key inputs to the Monte Carlo Simulation Model: As of December 31, Fair Value Assumptions - Senior Convertible Notes 2023 2022 Face value principal payable $ 3,136,271 $ 14,662,727 Conversion prices, as adjusted for the Reverse Stock Split and certain securities offerings $ 95.00 $ 95.00 Value of Common Stock on measurement date $ 8.80 $ 13.80 Expected term (years) 0.8 1.8 Volatility 96 % 77 % Market yield (range) 38.2 to 38.4 % 43.9 to 44.3 % Risk free rate 4.1 % 4.4 % Issue date October 5, 2021 October 5, 2021 Maturity date October 5, 2024 October 5, 2024 Fair Value Measurement – Private Warrants For the Private Warrants, which are classified as derivative liabilities on our consolidated balance sheets and measured at fair value categorized within Level 3 of the fair value hierarchy, the following is a reconciliation of the fair values for the years ended December 31, 2023 and December 31, 2022: Year Ended December 31, 2023 2022 Fair value balance at beginning of period $ — $ 63,178 Change in fair value reported in the statements of operations — (63,178 ) Fair value balance at end of period $ — $ — 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 2019 Public Warrants as of the end of the reporting periods. We recognize changes to the derivative liability against earnings or loss each reporting period. Upon exercise of the Private Warrants, holders will receive a delivery of Akerna shares on a net or gross share basis per the terms of the Private Warrants and any exercise will reclassify the Private Warrants, at the time of exercise, to stockholders’ equity to reflect the equity transaction. There are no periodic settlements prior to the holder exercising the Private Warrants. There were no transfers in or out of Level 3 from other levels for the fair value hierarchy. We estimated the fair value by using the following key inputs: As of December 31, Fair Value Assumptions - Private Warrants 2023 2022 Number of Private Warrants 225,635 225,635 Exercise price, as adjusted for the Reverse Stock Split $ 4,600.00 $ 4,600.00 Value of Common Stock on measurement date $ 8.80 $ 13.80 Expected term (years) 0.46 1.46 Volatility NM % NM Risk free rate NM % NM 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 Common and Underwriter Warrants July 5, 2022 Exercise price as adjusted for the Reverse Stock Split $ 70.36 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 measurement as defined in GAAP. The unobservable inputs utilized for measuring the fair value of the Common and Underwriter Warrants reflect our estimates regarding the assumptions that market participants would have used in valuing the Warrants as of the date of the 2022 Unit Offering or July 5, 2022. The fair value of the Common Warrants and Underwriter Warrants was recorded in equity as a component of the net proceeds received from the 2022 Unit Offering (see Note 13). |
Loss Per Share
Loss Per Share | 12 Months Ended |
Dec. 31, 2023 | |
Loss Per Share [Abstract] | |
Loss Per Share | Note 14 – Loss Per Share During the year ended December 31, 2023, we used the “two-class” method to compute net loss per share because we issued securities other than common shares that are economically equivalent to a common share in that the class of stock has the right to participate in dividends should a dividend be declared payable to holders of Common Stock. These participating securities were the Exchangeable Shares issued by our wholly owned subsidiary in exchange for interests in Ample. The two-class method requires earnings for the period to be allocated between common shares and participating securities based on their respective rights to receive distributed and undistributed earnings. Under the two-class method, for periods with net income, basic net income per common share is computed by dividing the net income attributable to common stockholders by the weighted average number of shares of common stock outstanding during the period. Net income attributable to common stockholders is computed by subtracting from net income the portion of current period earnings that the participating securities would have been entitled to receive pursuant to their dividend rights had all of the period’s earnings been distributed. No such adjustment to earnings is made during periods with a net loss, as the holders of the Exchangeable Shares have no obligation to fund losses. The Amended and Restated Secured Promissory Note is convertible into Common Stock upon the upon the closing of the Sale Transaction; however, this contingency was not met as of December 31, 2023 and, accordingly, the conversion feature is not considered a common stock equivalent as of December 31, 2023. Diluted net loss per common share is calculated under the two-class method by giving effect to all potentially dilutive common shares, including warrants, restricted stock, RSUs and shares of common stock issuable upon conversion of our Senior Convertible Notes. We analyzed the potential dilutive effect of any outstanding convertible securities under the “if-converted” method, in which it is assumed that the outstanding Exchangeable Shares and Senior Convertible Notes are converted to shares of Akerna Common Stock at the beginning of the period or date of issuance, if later. We report the more dilutive of the approaches (two-class or if-converted) as the diluted net loss per share during the period. The dilutive effect of unvested restricted stock and RSUs 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: Year Ended December 31, 2023 2022 Shares issuable upon the exchange of Exchangeable Shares 621 714 Warrants: 2019 Public Warrants 14,535 14,535 2022 Unit Offering - Common Warrants 108,696 108,696 2022 Unit Offering - Underwriter Warrants 5,435 5,435 Unvested RSUs 182 554 Unvested restricted stock awards — 17 Shares issuable upon conversion of the Senior Convertible Notes 33,014 154,345 Total 162,483 284,296 |
Discontinued Operations
Discontinued Operations | 12 Months Ended |
Dec. 31, 2023 | |
Discontinued Operations [Abstract] | |
Discontinued Operations | Note 15 – Discontinued Operations As discussed in Notes 1 and 4, we committed to a strategic shift in our business strategy and a complete exit from the SaaS business serving the cannabis industry. In support of that effort, we disposed of the Disposal Group through a series of sale transactions during 2023. We also effectively abandoned the Trellis, Solo and Viridian business units during 2023. Finally, we committed to the sale of MJF which closed in February 2024 in connection with the Sale Transaction and the Merger. We sold 365 Cannabis in January 2023 for cash proceeds of $0.5 million and the termination and release of the Earn-out Obligation. In accordance with the agreement to sell 365 Cannabis, which was entered into in 2022, we and the buyers agreed that the value of the Earn-out Obligation was $2.3 million, a reduction of $4.0 million from the original estimate. The gain associated with the reduction in estimate was recognized in the results of discontinued operations for the year ended December 31, 2022 in the table below. The Earn-out Obligation was reflected as Contingent consideration payable on our consolidated balance sheet as of December 31, 2022. We also sold LCA for cash proceeds of $0.1 million in January 2023. In connection with the sales of 365 Cannabis and LCA, we recognized a gain on the sale of discontinued operations of $0.2 million during the year ended December 31, 2023. The gain was primarily attributable to changes in the value of 365 Cannabis’ and LCA’s working capital from December 31, 2022 through the date that these transactions closed. As disclosed below, impairments of long-lived assets were recorded for 365 Cannabis and LCA during the year ended December 31, 2022 prior to the commitments to sell these business units. In December 2023, we sold Ample for cash proceeds of $0.638 million. Prior to our commitment to the sale, we recorded an impairment of Ample’s goodwill during the third quarter of 2023 and, in connection with the sale in the fourth quarter of 2023, we recorded impairments as disclosed below, to Ample’s goodwill and intangible assets in order to adjust the value of the business unit to its fair value. In accordance with the agreement to sell Ample, the buyer is permitted to seek post-closing adjustments for certain working capital items. The Company has 30 days to dispute any adjustments sought by the buyer and, if necessary, an additional 30 days to resolve any disputes. The maximum exposure for such adjustments is approximately $0.1 million. Subsequent to their sales, we will have no future involvement or relationships with these businesses. As a result of these actions, the assets and liabilities and results of operations of the Disposal Group have been classified as being attributable to discontinued operations, respectively, for all periods presented. The following table presents the major classes of assets and liabilities of the Disposal Group: As of December 31, 2023 2022 Cash and restricted cash $ — $ 305,411 Accounts receivable, net — 357,121 Prepaid expenses & other current assets — 666,252 Fixed assets — 63,764 Capitalized software, net — 1,483,111 Intangible assets, net — 5,406,094 Goodwill — 1,708,303 Total assets $ — $ 9,990,056 Accounts payable, accrued expenses and other current liabilities $ — $ 1,437,661 Deferred revenue — 994,713 Deferred revenue, noncurrent — 217,083 Total liabilities $ — $ 2,649,457 Current assets of discontinued operations $ — $ 1,328,784 Noncurrent assets of discontinued operations — 8,661,272 Total assets of discontinued operations $ — $ 9,990,056 Current liabilities of discontinued operations $ — $ 2,432,374 Noncurrent liabilities of discontinued operations — 217,083 Total liabilities of discontinued operations $ — $ 2,649,457 The following table summarizes the results of operations of the Disposal Group: For the Years Ended 2023 2022 Revenue $ 2,412,534 $ 12,640,170 Cost of revenue 575,246 2,919,208 Gross profit 1,837,288 9,720,962 Research and development 527,301 2,409,740 Sales and marketing 421,049 4,646,997 General and administrative 118,133 798,837 Depreciation and amortization 891,708 3,412,717 Impairment of long-lived assets 3,065,365 35,249,975 Changes in fair value of contingent consideration — (4,016,194 ) Other expense, net 1,833 — Interest expense — 746 Loss from discontinued operations before income taxes (3,188,101 ) (32,781,856 ) Income tax benefit — 2,117 Loss from discontinued operations, net of tax (3,188,101 ) (32,779,739 ) Gain on sale of discontinued operations, net of tax 212,601 — Net loss from discontinued operations, net of tax $ (2,975,500 ) $ (32,779,739 ) The $3.1 million charge for impairments of long-lived assets for the year ended December 31, 2023 are related to goodwill ($1.7 million) and intangible assets ($1.4 million), both of which were attributable to Ample. The $35.2 million charge for impairments of long-lived assets for the year ended December 31, 2022 are related to goodwill ($25.0 million), intangible assets ($9.9 million) and capitalized software ($0.3 million). Of this total, the amounts were attributed as follows: (i) $22.2 million to 365 Cannabis, (ii) $12.4 million to Ample, and (iii) $0.6 million to LCA. The Disposal Group incurred capital expenditures for capitalized software assets of $1.7 million for the year ended December 31, 2022 and no amounts were capitalized during the year ended December 31, 2023. There were no material non-cash investing and financing activities attributable to the Disposal Group for the year ended December 31, 2023. During the year ended December 31, 2022, there were two material non-cash investing and financing activities attributable to the original acquisition of 365 Cannabis. In connection with the finalization of the purchase accounting for 365 Cannabis in 2022, a total of 13,988 shares of Common Stock were returned to us for a value of $0.9 million and we recorded a non-cash reduction of $0.2 million in accrued expenses in connection with a working capital settlement. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Pay vs Performance Disclosure | ||
Net Income (Loss) | $ (11,578,169) | $ (79,057,610) |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Dec. 31, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation Our accompanying consolidated financial statements include the accounts of Akerna and our wholly-owned subsidiaries through the date of disposition where applicable. 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 impairment assessments, loss contingencies and the valuation allowance associated with deferred tax 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. |
Foreign Currency | Foreign Currency The functional currency of the Company’s non-U.S. operations is the local currency. Monetary assets and liabilities denominated in foreign currencies are translated into U.S. dollars at exchange rates prevailing at the balance sheet dates. Non-monetary assets and liabilities are translated at the historical rates in effect when the assets were acquired or obligations incurred. Revenue and expenses are translated into U.S. dollars using the average rates of exchange prevailing during the period. Translation gains or losses are included as a component of accumulated other comprehensive income (loss) within stockholders’ equity (deficit). Gains and losses resulting from foreign currency transactions are recognized as a component of Other income (expense) in our consolidated statements of operations. |
Cash and Cash Equivalents | Cash and Cash Equivalents We consider liquid instruments purchased with an original maturity of three months or less to be cash equivalents. We continually monitor our positions with, and the credit quality of, the financial institutions with which we invest. As of the balance sheet date, and periodically throughout the year, we have maintained balances in various operating accounts in excess of federally insured limits. |
Restricted Cash | Restricted Cash Restricted cash consists of funds that are contractually or legally restricted as to usage or withdrawal and is presented separately from cash on our consolidated balance sheets. |
Accounts Receivable, Net | Accounts Receivable, Net We maintain an allowance for current expected credit losses based on our historical collection experience, current conditions and reasonable and supportable forecasts. We pool our accounts receivables into two groups: (i) government and government-affiliated customers and (ii) small and medium-sized businesses (“SMB”). The customers within these two groups share similar risk characteristics. The government-affiliated customers generally have a higher credit quality as they are bound by contracts generally backed by the faith and credit of the related governments. Accordingly, we assess the accounts receivable from this group as less risky than those of the SMB group, which is more diverse in size and financial strength. |
Property and Equipment | Property and Equipment Property and equipment are recorded at cost, less accumulated depreciation. Expenditures for major additions and improvements are capitalized. Repairs and maintenance costs are expensed as incurred. Depreciation is provided over the estimated useful lives of the related assets using the straight-line method. The estimated useful lives for our furniture and computer equipment were 3 - 7 years. |
Software Development Costs | Software Development Costs Costs incurred during the application development stage of a newly developed application and costs we incur to enhance our existing platforms that meet certain criteria are subject to capitalization and subsequent amortization. Our software product development costs are primarily comprised of personnel costs such as payroll and benefits, vendor costs, and other costs directly attributable to the project. We capitalize costs only during the development phase. Any costs in connection to planning, design, and maintenance subsequent to release are expensed as incurred. We amortize software development costs over the expected useful life of the specific application, generally 2-5 years. We evaluate capitalized software development costs for impairment when there is an indication that the unamortized cost may not be recoverable. During the year ended December 31, 2022, we fully impaired our capitalized software development costs for our continuing operations. In addition, we recorded impairment charges attributable to certain capitalized software development costs of the Disposal Group during the year ended December 31, 2022 (see Note 15). |
Intangible Assets | Intangible Assets Intangible assets are amortized over their estimated useful lives. We evaluate the estimated remaining useful life of our intangible assets when events or changes in circumstances indicate an adjustment to the remaining amortization may be needed. We similarly evaluate the recoverability of these assets upon events or changes in circumstances indicate a potential impairment. Recoverability of these assets is measured by comparing the carrying amount of each asset to the future undiscounted cash flows the asset is expected to generate. If the undiscounted cash flows used in the test for recoverability are less than the carrying amount of these assets, the carrying amount of such assets is reduced to fair value. During the year ended December 31, 2022, we fully impaired our intangible assets for our continuing operations. In addition, we recorded impairment charges attributable to certain intangible assets of the Disposal Group during the year ended December 31, 2022 (see Note 15). |
Goodwill Impairment Assessment | Goodwill Impairment Assessment Goodwill represents the excess purchase consideration of an acquired business over the fair value of the net tangible and identifiable intangible assets. Goodwill is evaluated for impairment annually on October 31, and whenever events or changes in circumstances indicate the carrying value of goodwill may be impaired. Triggering events that may indicate impairment include, but are not limited to, a significant adverse change in customer demand or business climate or a significant decrease in expected cash flows. An impairment loss is recognized to the extent that the carrying amount exceeds the reporting unit’s fair value, not to exceed the carrying amount of goodwill. We have the option to first assess qualitative factors to determine whether events or circumstances indicate that it is more likely than not that the fair value of a reporting unit is less than its carrying amount and determine whether further action is needed. If, after assessing the totality of events or circumstances, we determine it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then performing the quantitative impairment test is unnecessary. During the year ended December 31, 2022, we fully impaired our goodwill for our continuing operations. In addition, we recorded impairment charges attributable to goodwill of the Disposal Group during the year ended December 31, 2022 (see Note 15). |
Fair Value of Financial Instruments | Fair Value of Financial Instruments ASC 820, Fair Value Measurements and Disclosures ● Level 1 – Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; ● Level 2 – Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability; ● Level 3 – Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity). The fair value of financial instruments is the amount at which the instrument could be exchanged in a current transaction between willing parties. The carrying values of financial instruments such as accounts receivable, accounts payable and accrued liabilities approximate fair value due to short-term nature of these instruments. |
Fair Value Option | Fair Value Option The fair value option provides an election that allows an entity to irrevocably elect to record certain financial assets and liabilities at fair value on an instrument-by-instrument basis at initial recognition. We have elected to apply the fair value option to our 2021 Senior Secured Convertible Notes (the “Senior Convertible Notes”) due to the complexity of the various conversion and settlement options available to both the holders of such notes and Akerna. The Senior Convertible Notes accounted for under the fair value option election are each a debt host financial instrument containing embedded features that would otherwise be required to be bifurcated from the debt-host and recognized as separate derivative liabilities subject to initial and subsequent periodic estimated fair value measurements in accordance with GAAP. Notwithstanding, when the fair value option election is applied to financial liabilities, bifurcation of an embedded derivative is not required, and the financial liability is initially measured at its issue-date estimated fair value and then subsequently remeasured at estimated fair value on a recurring basis as of each reporting period date. The portion of the change in fair value attributed to a change in the instrument-specific credit risk is recognized as a component of other comprehensive income (loss) within stockholders’ equity (deficit) and the remaining amount of the fair value adjustment is recognized as other income (expense) in our consolidated statement of operations. The estimated fair value adjustment is presented in a respective single line item within other income (expense) in the accompanying consolidated statement of operations because the change in fair value of the convertible notes was not attributable to instrument-specific credit risk. |
Warrants [Policy Text Block] | 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 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 our capital structure. Warrants that are indexed to our Common Stock while we meet certain other conditions with respect to our capital structure, including the ability to satisfy the warrant settlement obligations with a sufficient number of registered shares, do not qualify as derivatives and are classified as components of equity. Certain of the warrants sold by MTech in its initial public offering that were converted to Akerna warrants in connection with the Formation Mergers (the “Private Warrants”) are not indexed to our Common Stock in the manner contemplated as described herein. As a result, the Private Warrants are precluded from equity classification and are recorded as derivative liabilities. At the end of each reporting period, changes in fair value during the period are recognized within the condensed consolidated statements of operations. We will continue to adjust this derivative liability for changes in the fair value until the earlier of (a) the exercise or expiration of the Private Warrants or (b) the redemption of the Private Warrants, at which time they will be reclassified to Additional paid-in capital. As of December 31, 2023 and 2022, all of our other outstanding warrants, including certain other MTech warrants that were converted to Akerna warrants upon our formation (the “2019 Public Warrants”), are classified within stockholders’ equity (deficit). |
Revenue Recognition | Revenue Recognition We recognize revenue when a customer obtains the benefit of promised services, in an amount that reflects the consideration that 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. Sales taxes collected from customers and remitted to government authorities are excluded from revenue. Software Revenue 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. Other Revenue. Cost of Revenue. Unbilled Receivables. Deferred Revenue |
Legal and Other Contingencies | Legal and Other Contingencies From time to time, we may be a party to litigation and subject to claims incident to the ordinary course of business, including intellectual property claims, labor and employment claims, breach of contract claims and other asserted and unasserted claims. We investigate these claims as they arise and 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. |
Stock-Based Compensation | Stock-Based Compensation We measured stock-based compensation based on the fair value of the share-based awards on the date of grant and recognize the related costs on a straight-line basis over the requisite service period, which is generally the vesting period. Stock-based compensation expense is included in operating expenses and cost of sales of our continuing and discontinued operations in our consolidated statements of operations consistent with the allocation of other compensation arrangements. In addition, stock-based compensation costs attributable to certain employees engaged in developing software are capitalized in connection with other compensation costs to the extent the underlying projects meet the criteria for capitalized software development costs. During 2022, we capitalized less than $0.1 million of stock-based compensation and no amounts were capitalized during 2023. |
Income Taxes | Income Taxes Income taxes are accounted for using the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax basis of other assets and liabilities. We provide for income taxes at the current and future enacted tax rates and laws applicable in each taxing jurisdiction. We use a two-step approach for recognizing and measuring tax benefits taken or expected to be taken in a tax return and disclosures regarding uncertainties in income tax positions. We recognize interest and penalties related to income tax matters in selling, general and administrative expenses in the consolidated statement of operations. We recognize deferred tax assets to the extent that our assets are more likely than not to be realized. In making such a determination, we consider all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies, and results of recent operations. If we determine that we would be able to realize our deferred tax assets in the future in excess of its net recorded amount, we will make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes. As of December 31, 2023 and 2022, management has applied a valuation allowance to deferred tax assets when it is determined that the benefit from the deferred tax asset will not be able to be utilized in a future period. |
Segments | Segments We operate our business as one operating segment. Operating segments are defined as components of an enterprise about which separate financial information is evaluated by the chief operating decision maker (“CODM”), our Chief Executive Officer, for purposes of allocating resources and assessing financial performance. Our CODM allocates resources and assesses performance based upon discrete financial information at the consolidated level. |
Discontinued Operations | Discontinued Operations In accordance with GAAP, we assess our business units that we may, from time to time, consider for disposal by sale or other means (i.e., abandonment). Those business units, which may be in the form of legal entities, divisions, product lines or asset and liability groups, among others, for which cash flows can be reasonably identified, that meet certain criteria are considered discontinued operations. Accordingly, their results of operations are presented in our statements of operations as “discontinued operations” and their associated assets and liabilities are considered “discontinued,” as appropriate on our consolidated balance sheets. |
Subsequent Events | Subsequent Events Management has evaluated all of our activities through the issuance date of our consolidated financial statements and has concluded that, with the exception of the completion of the Sale Transaction and the Merger in February 2024, as disclosed in detail in Note 4, no other subsequent events have occurred that would require recognition and disclosure in our consolidated financial statements or disclosure in the notes thereto. |
Adoption of Recent Accounting Pronouncements | Adoption of Recent Accounting Pronouncements The FASB issued ASU No. 2016-13, Measurement of Credit Losses on Financial Instruments |
Revenue and Contracts with Cu_2
Revenue and Contracts with Customers (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Revenue and Contracts with Customers [Abstract] | |
Schedule of Disaggregation by Customer Type | The following table summarizes our revenue disaggregation by customer type for the following periods: For the Years Ended 2023 2022 Government $ 2,564,846 $ 3,357,978 Non-government 4,271,598 7,100,192 $ 6,836,444 $ 10,458,170 |
Schedule of Expected Credit Losses | The allowance for expected credit losses was comprised of the following activity: For the Years Ended December 31, 2023 2022 Allowance for expected credit losses at beginning of period $ 331,262 $ 305,517 Bad debt expense (1) 63,358 415,009 Write-off uncollectable accounts (377,148 ) (389,264 ) Allowance for expected credit losses at end of period $ 17,472 $ 331,262 (1) Bad debt expense is recognized as a component of General and administrative expenses. Includes amounts attributable to unbilled accounts receivable (see Note 7). |
Schedule of Deferred Revenue Activity | The following table summarizes deferred revenue activity for the year ended December 31, 2023: Beginning of Net Revenue End of Deferred revenue - 2023 $ 730,574 2,802,913 3,133,835 $ 399,652 Deferred revenue - 2022 1,040,010 5,446,403 5,755,839 730,574 |
Schedule of Deferred Contract Cost Activity | The following table summarizes deferred contract cost activity for the year ended December 31, 2023: Beginning of Additions Amortized End of Deferred contract costs - 2023 $ 36,465 — 36,465 $ — Deferred contract costs - 2022 142,930 124,690 231,155 36,465 (1) Includes contract costs amortized to Sales and marketing expense during the period. |
Fixed Assets, Net and Other N_2
Fixed Assets, Net and Other Noncurrent Assets (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Fixed Assets, Net and Other Noncurrent Assets [Asbtract] | |
Schedule of Fixed Assets | Fixed assets consisted of the following: As of December 31, 2023 2022 Furniture and computer equipment $ 80,759 $ 154,137 Less: accumulated depreciation (59,070 ) (105,257 ) Fixed assets, net $ 21,689 $ 48,880 |
Supplemental Balance Sheet Di_2
Supplemental Balance Sheet Disclosures (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Fixed Assets, Net and Other Noncurrent Assets [Asbtract] | |
Schedule of Prepaid Expenses and Other Current Assets | Prepaid expenses and other current assets consisted of the following: As of December 31, 2023 2022 Software and technology $ 27,518 $ 309,466 Professional services, dues and subscriptions 4,723 18,268 Insurance — 168,935 Deferred contract costs — 36,465 Unbilled receivable 370,326 534,925 Other 17,515 53,704 Total prepaid expenses and other current assets $ 420,082 $ 1,121,763 |
Schedule of Accounts Payable, Accrued Expenses and Other Current Liabilities | Accounts payable, accrued expenses and other current liabilities consisted of the following: As of December 31, 2023 2022 Accounts payable $ 2,165,342 $ 1,417,835 Professional fees 1,041,699 143,749 Sales taxes 107,923 63,983 Compensation 397,754 334,514 Contractors 160,739 521,145 Settlements and legal 248,031 934,396 Interest 699,142 597,873 Other — 9,688 Total accounts payable, accrued expenses and other current liabilities $ 4,820,630 $ 4,023,183 |
Long Term Debt (Tables)
Long Term Debt (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Long Term Debt [Abstract] | |
Schedule of Long Term Debt | Long-term debt consisted of the following: As of December 31, 2023 2022 Total long-term debt $ 5,149,000 $ 14,607,000 Less: current maturities (5,149,000 ) (13,200,000 ) Total long-term debt, less current portion $ — $ 1,407,000 |
Schedule of Maturities of debt | Maturities of our debt as of December 31, 2023 are presented below. Maturities due for the Senior Convertible Notes during 2024 $ 3,136,271 Maturities due for the Amended and Restated Secured Promissory Note during 2024 1,650,000 Original issue discount of the Senior Convertible Notes (2,000,000 ) Cumulative unrealized change in fair value of the Senior Convertible Notes 2,362,729 Total debt outstanding $ 5,149,000 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Income Taxes [Abstract] | |
Schedule of Expense or (Benefit) for Income Taxes | The following table sets forth the expense or (benefit) for income taxes: Year Ended December 31, 2023 2022 Current income tax expense (benefit) U.S. federal $ — $ (50,000 ) U.S. state — 2,826 Foreign — — Total current income taxes — (47,174 ) Deferred income tax benefit U.S. federal $ — $ (653,945 ) U.S. state — — Total deferred income benefit — (653,945 ) Total income tax benefit $ — $ (701,119 ) |
Schedule of Statutory Federal Income Tax Rate to Actual Expense Based on Loss Before Income Taxes | The following table sets forth reconciliations of the income tax expense at the statutory federal income tax rate to actual expense based on our loss before income taxes: Year Ended December 31, 2023 2022 Income tax expense (benefit) attributable to: Federal $ (2,406,564 ) $ (16,749,778 ) State, net of federal benefit (252,836 ) (853,392 ) Foreign tax rate differential (76,018 ) (11,543 ) Transaction costs 167,137 — Other permanent differences 207,525 472,270 Goodwill impairment 358,744 9,172,756 Rate changes (51,003 ) (992 ) Changes in valuation allowance (3,591,436 ) 7,501,917 Provision to return adjustment 486,727 62,788 Deferred impact of subsidiary sales 5,157,724 (247,839 ) Other adjustments — (47,306 ) Effective income tax expense (benefit) $ — $ (701,119 ) |
Shedule of Deferred Income Tax Assets and Liabilities | The following table sets forth our deferred income tax assets and liabilities: As of December 31, 2023 2022 Noncurrent deferred tax assets: Employee compensation $ 63,091 $ 136,154 Debt issuance costs — 39,381 Revenue recognition — 64,662 Settlement accrual 49,575 178,549 Fixed assets 171,268 774,936 Section 174 capitalization 1,219,926 1,121,311 Federal and state net operating loss 14,226,635 13,860,338 Foreign net operating loss 56,739 4,641,293 Other 4,718 280,430 Total deferred tax assets $ 15,791,952 $ 21,097,054 Noncurrent deferred tax liabilities: Intangible assets — (1,713,666 ) Total deferred tax liabilities $ — $ (1,713,666 ) Valuation allowance (15,791,952 ) (19,383,388 ) Deferred tax asset (liability), net after valuation allowance $ — $ — |
Stockholders_ Equity (Deficit)
Stockholders’ Equity (Deficit) (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Stockholders’ Equity (Deficit) [Abstract] | |
Schedule of Warrants Outstanding | The following table summarizes our warrants outstanding as of the dates presented: Exercise Expiration As of Issued Exercised Expired As of 2019 Public Warrants (1) $ 4,600.00 6/19/2024 5,813,804 — — — 5,813,804 2022 Unit Offering Common Warrants (2) $ 70.36 6/29/2027 43,478,261 — — — 43,478,261 Underwriter Warrants (2) $ 70.36 6/29/2027 2,173,913 — — — 2,173,913 51,465,978 — — — 51,465,978 (1) The 2019 Public Warrants are exercisable for 14,535 shares of Common Stock at $4,600.00 per share or a ratio of 400 warrants for one share of Common Stock. (2) The Common Warrants and Underwriter Warrants are exercisable for a combined amount of 114,130 shares of Common Stock at $70.36 per share or a ratio of 400 warrants for one share of Common Stock. |
Stock-Based Compensation and _2
Stock-Based Compensation and Other Benefit Plans (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Stock-Based Compensation and Other Benefit Plans [Abstract] | |
Schedule of Unvested Restricted Shares and RSUs Activity | A summary of our unvested Restricted Shares and RSUs activity is presented in the table below: Restricted Restricted Total Weighted Unvested as of December 31, 2021 81 1,709 1,790 $ 2,188.00 Granted — 707 707 270.80 Vested (64 ) (1,124 ) (1,188 ) 1,081.20 Forfeited — (739 ) (739 ) 2,248.20 Unvested as of December 31, 2022 17 553 570 $ 1,793.20 Granted — — — — Vested (17 ) (259 ) (276 ) 2,045.80 Forfeited — (113 ) (113 ) 1,372.40 Unvested as of December 31, 2023 — 181 181 $ 1,801.00 |
Fair Value (Tables)
Fair Value (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Fair Value [Line Items] | |
Schedule of Fair Value Categorized Within Level 3 of the Fair Value Hierarchy | For the Senior Secured Notes, which are measured at fair value categorized within Level 3 of the fair value hierarchy, the following is a reconciliation of the fair value from January 1, 2022 to December 31, 2023: Senior Convertible Notes Beginning fair value balance - January 1, 2022 $ 17,305,000 Principal payments in cash and Common Stock (5,337,273 ) Change in fair value reported in the statements of operations 2,884,273 Change in fair value reported in other comprehensive income (245,000 ) Ending fair value balance - December 31, 2022 $ 14,607,000 Principal payments in cash and Common Stock (11,526,457 ) Change in fair value reported in the statements of operations 370,457 Change in fair value reported in other comprehensive income 48,000 Ending fair value balance - December 31, 2023 $ 3,499,000 |
Schedule of Reconciliation of the Fair Values | the following is a reconciliation of the fair values for the years ended December 31, 2023 and December 31, 2022: Year Ended December 31, 2023 2022 Fair value balance at beginning of period $ — $ 63,178 Change in fair value reported in the statements of operations — (63,178 ) Fair value balance at end of period $ — $ — |
Convertible Debt [Member] | |
Fair Value [Line Items] | |
Schedule of Fair Value by Using Key Inputs | We determined the fair value of the Senior Convertible Notes by using the following key inputs to the Monte Carlo Simulation Model: As of December 31, Fair Value Assumptions - Senior Convertible Notes 2023 2022 Face value principal payable $ 3,136,271 $ 14,662,727 Conversion prices, as adjusted for the Reverse Stock Split and certain securities offerings $ 95.00 $ 95.00 Value of Common Stock on measurement date $ 8.80 $ 13.80 Expected term (years) 0.8 1.8 Volatility 96 % 77 % Market yield (range) 38.2 to 38.4 % 43.9 to 44.3 % Risk free rate 4.1 % 4.4 % Issue date October 5, 2021 October 5, 2021 Maturity date October 5, 2024 October 5, 2024 |
Private warrant [Member] | |
Fair Value [Line Items] | |
Schedule of Fair Value by Using Key Inputs | We estimated the fair value by using the following key inputs: As of December 31, Fair Value Assumptions - Private Warrants 2023 2022 Number of Private Warrants 225,635 225,635 Exercise price, as adjusted for the Reverse Stock Split $ 4,600.00 $ 4,600.00 Value of Common Stock on measurement date $ 8.80 $ 13.80 Expected term (years) 0.46 1.46 Volatility NM % NM Risk free rate NM % NM |
Common Warrants and Underwriter Warrants [Member] | |
Fair Value [Line Items] | |
Schedule of Fair Value Measurement 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 Common and Underwriter Warrants July 5, 2022 Exercise price as adjusted for the Reverse Stock Split $ 70.36 Expected term (years) 5.0 Volatility 136.9 % |
Loss Per Share (Tables)
Loss Per Share (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Loss Per Share [Abstract] | |
Schedule of Diluted Earnings Per Share | The table below details potentially outstanding shares on a fully diluted basis that were not included in the calculation of diluted earnings per share: Year Ended December 31, 2023 2022 Shares issuable upon the exchange of Exchangeable Shares 621 714 Warrants: 2019 Public Warrants 14,535 14,535 2022 Unit Offering - Common Warrants 108,696 108,696 2022 Unit Offering - Underwriter Warrants 5,435 5,435 Unvested RSUs 182 554 Unvested restricted stock awards — 17 Shares issuable upon conversion of the Senior Convertible Notes 33,014 154,345 Total 162,483 284,296 |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Discontinued Operations [Abstract] | |
Schedule of Assets and Liabilities of the Disposal Group | The following table presents the major classes of assets and liabilities of the Disposal Group: As of December 31, 2023 2022 Cash and restricted cash $ — $ 305,411 Accounts receivable, net — 357,121 Prepaid expenses & other current assets — 666,252 Fixed assets — 63,764 Capitalized software, net — 1,483,111 Intangible assets, net — 5,406,094 Goodwill — 1,708,303 Total assets $ — $ 9,990,056 Accounts payable, accrued expenses and other current liabilities $ — $ 1,437,661 Deferred revenue — 994,713 Deferred revenue, noncurrent — 217,083 Total liabilities $ — $ 2,649,457 Current assets of discontinued operations $ — $ 1,328,784 Noncurrent assets of discontinued operations — 8,661,272 Total assets of discontinued operations $ — $ 9,990,056 Current liabilities of discontinued operations $ — $ 2,432,374 Noncurrent liabilities of discontinued operations — 217,083 Total liabilities of discontinued operations $ — $ 2,649,457 |
Schedule of Operations of the Disposal Group | The following table summarizes the results of operations of the Disposal Group: For the Years Ended 2023 2022 Revenue $ 2,412,534 $ 12,640,170 Cost of revenue 575,246 2,919,208 Gross profit 1,837,288 9,720,962 Research and development 527,301 2,409,740 Sales and marketing 421,049 4,646,997 General and administrative 118,133 798,837 Depreciation and amortization 891,708 3,412,717 Impairment of long-lived assets 3,065,365 35,249,975 Changes in fair value of contingent consideration — (4,016,194 ) Other expense, net 1,833 — Interest expense — 746 Loss from discontinued operations before income taxes (3,188,101 ) (32,781,856 ) Income tax benefit — 2,117 Loss from discontinued operations, net of tax (3,188,101 ) (32,779,739 ) Gain on sale of discontinued operations, net of tax 212,601 — Net loss from discontinued operations, net of tax $ (2,975,500 ) $ (32,779,739 ) |
Description of Business (Detail
Description of Business (Details) - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | |||
May 31, 2022 | Feb. 09, 2024 | Dec. 31, 2023 | Dec. 31, 2022 | |
Description of Business [Line Items] | ||||
Common stock par value (in Dollars per share) | $ 0.0001 | $ 0.0001 | ||
Incurred paid (in Dollars) | $ 0.6 | |||
Gryphon Digital Mining Inc [Member] | ||||
Description of Business [Line Items] | ||||
Owned subsidiary percentage | 92.50% | |||
Akerna Merger Co. [Member] | ||||
Description of Business [Line Items] | ||||
Owned subsidiary percentage | 7.50% | |||
Subsequent Event [Member] | Common Stock [Member] | ||||
Description of Business [Line Items] | ||||
Common stock par value (in Dollars per share) | $ 0.0001 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Summary of Significant Accounting Policies (Details) [Line Items] | ||
Capitalized stock-based compensation (in Dollars) | $ 0.1 | |
Minimum [Member] | ||
Summary of Significant Accounting Policies (Details) [Line Items] | ||
Estimated useful lives | 3 years | |
Maximum [Member] | ||
Summary of Significant Accounting Policies (Details) [Line Items] | ||
Estimated useful lives | 7 years | |
Supplier Concentration Risk [Member] | Revenue Benchmark [Member] | Account Receivable [Member] | ||
Summary of Significant Accounting Policies (Details) [Line Items] | ||
Total revenues | 30% | |
Software and Software Development Costs [Member] | Minimum [Member] | ||
Summary of Significant Accounting Policies (Details) [Line Items] | ||
Estimated useful lives | 2 years | |
Software and Software Development Costs [Member] | Maximum [Member] | ||
Summary of Significant Accounting Policies (Details) [Line Items] | ||
Estimated useful lives | 5 years |
Change in Control (Details)
Change in Control (Details) - USD ($) | 12 Months Ended | |||||||||
Feb. 09, 2024 | Feb. 08, 2024 | Dec. 06, 2023 | Jun. 30, 2023 | Jan. 27, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 20, 2023 | Dec. 14, 2023 | Apr. 28, 2023 | |
Change in Control (Details) [Line Items] | ||||||||||
Securities purchase agreement | $ 4,000,000 | |||||||||
Fee and reimbursement | $ 200,000 | |||||||||
Purchase price value | $ 5,000,000 | |||||||||
Purchase price value in cash | 4,000,000 | |||||||||
Cash paid | $ 1,850,000 | |||||||||
Cash | 4,000,000 | |||||||||
Common stock closing equivalent | $ 1,650,000 | |||||||||
Outstanding shares of Common Stock, rate | 19.90% | |||||||||
Conversion price per share (in Dollars per share) | $ 95 | |||||||||
Shares issue (in Shares) | 1,711 | |||||||||
Shares of outstanding, common stock (in Shares) | 100 | |||||||||
Conversion principal amount | $ 3,187,101 | $ 3,925,500 | ||||||||
Common stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 | ||||||||
Common stock, shares outstanding (in Shares) | 517,605 | 230,140 | ||||||||
Loan [Member] | ||||||||||
Change in Control (Details) [Line Items] | ||||||||||
Principal amount | $ 1,000,000 | |||||||||
Restated Secured Promissory Note [Member] | ||||||||||
Change in Control (Details) [Line Items] | ||||||||||
Principal amount | $ 1,650,000 | |||||||||
Senior Convertible Notes [Member] | ||||||||||
Change in Control (Details) [Line Items] | ||||||||||
Principal amount | $ 3,187,000 | $ 3,422,000 | ||||||||
Conversion price lowered (in Dollars per share) | $ 10 | $ 24 | ||||||||
Exchange convertible shares (in Shares) | 237,213 | |||||||||
Senior Convertible Notes [Member] | Exchange Agreements [Member] | ||||||||||
Change in Control (Details) [Line Items] | ||||||||||
Principal amount | $ 1,711,000 | |||||||||
Series C Preferred Stock [Member] | ||||||||||
Change in Control (Details) [Line Items] | ||||||||||
Preferred stock, authorized (in Shares) | 3,422 | 3,422 | 3,244 | |||||||
Preferred stock, par value (in Dollars per share) | $ 1,000 | $ 1,000 | $ 1,000 | |||||||
Shares issue (in Shares) | 3,422 | |||||||||
Common Stock [Member] | ||||||||||
Change in Control (Details) [Line Items] | ||||||||||
Shares issue (in Shares) | 100 | |||||||||
Shares of outstanding, common stock (in Shares) | 15 | |||||||||
Exchange shares (in Shares) | 756,746 | |||||||||
Gryphon Digital Mining Inc [Member] | ||||||||||
Change in Control (Details) [Line Items] | ||||||||||
Conversion principal amount | $ 1,650,000 | |||||||||
Subsequent Event [Member] | ||||||||||
Change in Control (Details) [Line Items] | ||||||||||
Aggregate purchase price | $ 1,284,000 | |||||||||
Shares issue (in Shares) | 446,611 | |||||||||
Conversion price per share (in Dollars per share) | $ 0.23 | |||||||||
Face value | $ 1,000 | |||||||||
Aggrecate liabilities | $ 2,100,000 | |||||||||
Subsequent Event [Member] | Exchange Agreements [Member] | ||||||||||
Change in Control (Details) [Line Items] | ||||||||||
Shares issue (in Shares) | 3,244 | |||||||||
Conversion price per share (in Dollars per share) | $ 4.6 | |||||||||
Subsequent Event [Member] | ERTC Agreement [Member] | ||||||||||
Change in Control (Details) [Line Items] | ||||||||||
Aggrecate liabilities | $ 2,100,000 | |||||||||
Subsequent Event [Member] | Restated Secured Promissory Note [Member] | ||||||||||
Change in Control (Details) [Line Items] | ||||||||||
Principal amount | $ 1,650,000 | |||||||||
Subsequent Event [Member] | Senior Convertible Notes [Member] | ||||||||||
Change in Control (Details) [Line Items] | ||||||||||
Exchange convertible shares (in Shares) | 824,977 | |||||||||
Subsequent Event [Member] | Common Stock [Member] | ||||||||||
Change in Control (Details) [Line Items] | ||||||||||
Common stock, par value (in Dollars per share) | $ 0.0001 | |||||||||
Subsequent Event [Member] | Gryphon Digital Mining Inc [Member] | ||||||||||
Change in Control (Details) [Line Items] | ||||||||||
Preferred stock, par value (in Dollars per share) | 0.0001 | |||||||||
Common stock, par value (in Dollars per share) | $ 0.0001 | |||||||||
Common stock, shares outstanding (in Shares) | 38,733,554 | |||||||||
Subsequent Event [Member] | Gryphon Common Stock [Member] | ||||||||||
Change in Control (Details) [Line Items] | ||||||||||
Shares issue (in Shares) | 1.7273744 | |||||||||
MJ Acquisition [Member] | ||||||||||
Change in Control (Details) [Line Items] | ||||||||||
Working capital purposes | $ 650,000 |
Revenue and Contracts with Cu_3
Revenue and Contracts with Customers (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Revenue and Contracts with Customers [Line Items] | |||
Accounts receivable current | $ 147,855 | $ 429,949 | |
Percentage of account receivable from customers | 51% | ||
Performance obligations | 2,500,000 | ||
Deferred revenue revenue recognized | $ 6,800,000 | $ 10,500,000 | |
Deferred revenue | 500,000 | $ 1,200,000 | |
Customer relationship period | 1 year | ||
Transaction Price Allocated to Future Performance Obligations [Member] | |||
Revenue and Contracts with Customers [Line Items] | |||
Performance obligations | $ 2,400,000 | ||
Accounts Receivable from Customers [Member] | |||
Revenue and Contracts with Customers [Line Items] | |||
Accounts receivable current | $ 219,912 |
Revenue and Contracts with Cu_4
Revenue and Contracts with Customers (Details) - Schedule of Disaggregation by Customer Type - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Schedule of Revenue Disaggregation by Customer Type and Geographic Region [Line Items] | ||
Revenue disaggregation | $ 6,836,444 | $ 10,458,170 |
Government [Member] | ||
Schedule of Revenue Disaggregation by Customer Type and Geographic Region [Line Items] | ||
Revenue disaggregation | 2,564,846 | 3,357,978 |
Non-government [Member] | ||
Schedule of Revenue Disaggregation by Customer Type and Geographic Region [Line Items] | ||
Revenue disaggregation | $ 4,271,598 | $ 7,100,192 |
Revenue and Contracts with Cu_5
Revenue and Contracts with Customers (Details) - Schedule of Expected Credit Losses - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | ||
Schedule of Expected Credit Losses [Abstract] | |||
Allowance for expected credit losses at beginning of period | $ 331,262 | $ 305,517 | |
Allowance for expected credit losses at end of period | 17,472 | 331,262 | |
Bad debt expense | [1] | 63,358 | 415,009 |
Write-off uncollectable accounts | $ (377,148) | $ (389,264) | |
[1]Bad debt expense is recognized as a component of General and administrative expenses. Includes amounts attributable to unbilled accounts receivable (see Note 7). |
Revenue and Contracts with Cu_6
Revenue and Contracts with Customers (Details) - Schedule of Deferred Revenue Activity | 12 Months Ended |
Dec. 31, 2023 USD ($) | |
Deferred revenue 2023 [Member] | |
Revenue and Contracts with Customers (Details) - Schedule of Deferred Revenue Activity [Line Items] | |
Deferred revenue | $ 730,574 |
Deferred revenue, Net additions | 2,802,913 |
Deferred revenue, Revenue recognized | 3,133,835 |
Deferred revenue ending balance | 399,652 |
Deferred revenue 2022 [Member] | |
Revenue and Contracts with Customers (Details) - Schedule of Deferred Revenue Activity [Line Items] | |
Deferred revenue | 1,040,010 |
Deferred revenue, Net additions | 5,446,403 |
Deferred revenue, Revenue recognized | 5,755,839 |
Deferred revenue ending balance | $ 730,574 |
Revenue and Contracts with Cu_7
Revenue and Contracts with Customers (Details) - Schedule of Deferred Contract Cost Activity - USD ($) | 1 Months Ended | ||
Dec. 31, 2023 | Dec. 01, 2023 | ||
Deferred contract costs 2023 [Member] | |||
Revenue and Contracts with Customers (Details) - Schedule of Deferred Contract Cost Activity [Line Items] | |||
Deferred contract costs, beginning balance | $ 36,465 | ||
Deferred contract costs, additions | |||
Deferred contract, amortized costs | [1] | $ 36,465 | |
Deferred contract costs, ending balance | 36,465 | ||
Deferred contract costs 2022 [Member] | |||
Revenue and Contracts with Customers (Details) - Schedule of Deferred Contract Cost Activity [Line Items] | |||
Deferred contract costs, beginning balance | 142,930 | ||
Deferred contract costs, additions | 124,690 | ||
Deferred contract, amortized costs | [1] | 231,155 | |
Deferred contract costs, ending balance | $ 36,465 | $ 142,930 | |
[1] Includes contract costs amortized to Sales and marketing expense during the period. |
Fixed Assets, Net and Other N_3
Fixed Assets, Net and Other Noncurrent Assets (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Fixed Assets, Net and Other Noncurrent Assets [Line Items] | ||
Depreciation expense | $ 27,883 | $ 44,841 |
Noncurrent assets | 28,700,000 | |
Capitalized software | 6,100,000 | |
Intangible assets | 3,900,000 | |
Goodwill | 18,700,000 | |
Capitalized software additions | 2,200,000 | |
Capitalized software amortization | 4,400,000 | |
Attributable to capitalized software | 700,000 | |
Attributable to intangible assets | 3,700,000 | |
Impairment charges | 26,500,000 | |
Impairment charges on capitalized software | 4,600,000 | |
Other Intangible Assets, Net | 3,200,000 | |
Impairment charges on goodwill | 18,700,000 | |
MJF [Member] | ||
Fixed Assets, Net and Other Noncurrent Assets [Line Items] | ||
Noncurrent assets | 3,000,000 | |
Trellis [Member] | ||
Fixed Assets, Net and Other Noncurrent Assets [Line Items] | ||
Noncurrent assets | 2,100,000 | |
Solo [Member] | ||
Fixed Assets, Net and Other Noncurrent Assets [Line Items] | ||
Noncurrent assets | 14,400,000 | |
Viridian [Member] | ||
Fixed Assets, Net and Other Noncurrent Assets [Line Items] | ||
Noncurrent assets | $ 7,000,000 |
Fixed Assets, Net and Other N_4
Fixed Assets, Net and Other Noncurrent Assets (Details) - Schedule of Fixed Assets - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Schedule of Fixed Assets [Abstrac] | ||
Furniture and computer equipment | $ 80,759 | $ 154,137 |
Less: accumulated depreciation | (59,070) | (105,257) |
Fixed assets, net | $ 21,689 | $ 48,880 |
Supplemental Balance Sheet Di_3
Supplemental Balance Sheet Disclosures (Details) - Schedule of Prepaid Expenses and Other Current Assets - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Schedule of Prepaid Expenses and Other Current Assets [Abstract] | ||
Software and technology | $ 27,518 | $ 309,466 |
Professional services, dues and subscriptions | 4,723 | 18,268 |
Insurance | 168,935 | |
Deferred contract costs | 36,465 | |
Unbilled receivable | 370,326 | 534,925 |
Other | 17,515 | 53,704 |
Total prepaid expenses and other current assets | $ 420,082 | $ 1,121,763 |
Supplemental Balance Sheet Di_4
Supplemental Balance Sheet Disclosures (Details) - Schedule of Accounts Payable, Accrued Expenses and Other Current Liabilities - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Schedule of Accounts Payable, Accrued Expenses and Other Current Liabilities [Abstract] | ||
Accounts payable | $ 2,165,342 | $ 1,417,835 |
Professional fees | 1,041,699 | 143,749 |
Sales taxes | 107,923 | 63,983 |
Compensation | 397,754 | 334,514 |
Contractors | 160,739 | 521,145 |
Settlements and legal | 248,031 | 934,396 |
Interest | 699,142 | 597,873 |
Other | 9,688 | |
Total accounts payable, accrued expenses and other current liabilities | $ 4,820,630 | $ 4,023,183 |
Long Term Debt (Details)
Long Term Debt (Details) - USD ($) | 12 Months Ended | |||||||
May 03, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | Feb. 09, 2024 | Jun. 14, 2023 | Jan. 31, 2023 | Oct. 04, 2022 | Oct. 05, 2021 | |
Long term debt [Line items] | ||||||||
Convertible notes settled in cash | $ 4,900,000 | |||||||
Senior convertible notes | 3,500,000 | $ 14,600,000 | ||||||
Received amount | $ 650,000 | 1,650,000 | ||||||
Senior Convertible [Member] | ||||||||
Long term debt [Line items] | ||||||||
Principal amount | $ 400,000 | 2,700,000 | ||||||
Senior Convertible Notes [Member] | ||||||||
Long term debt [Line items] | ||||||||
Convertible notes settled in cash | 3,900,000 | |||||||
Settled in shares (in Shares) | 10,371 | |||||||
Accumulated in equity | $ 400,000 | |||||||
Senior Convertible Notes [Member] | Minimum [Member] | ||||||||
Long term debt [Line items] | ||||||||
Note Receivable | 100,000 | |||||||
Senior Convertible Notes [Member] | Maximum [Member] | ||||||||
Long term debt [Line items] | ||||||||
Note Receivable | 200,000 | |||||||
Accumulated in equity | $ 2,900,000 | |||||||
Securities Purchase Agreement [Member] | ||||||||
Long term debt [Line items] | ||||||||
Conversion price per share (in Dollars per share) | $ 124.2 | |||||||
Securities Purchase Agreement [Member] | Senior Convertible [Member] | ||||||||
Long term debt [Line items] | ||||||||
Principal amount | $ 20,000,000 | |||||||
Reflecting principal amount | $ 18,000,000 | |||||||
Percentage of principal amount | 10% | |||||||
Original issue discount amount | $ 2,000,000 | |||||||
Maturity date | Oct. 04, 2024 | |||||||
Securities Purchase Agreement [Member] | Senior Convertible Notes [Member] | ||||||||
Long term debt [Line items] | ||||||||
Conversion price per share (in Dollars per share) | $ 95 | |||||||
Senior Convertible [Member] | ||||||||
Long term debt [Line items] | ||||||||
Principal amount | $ 11,500,000 | 5,300,000 | ||||||
Convertible notes settled in cash | $ 1,400,000 | |||||||
Senior Convertible [Member] | Minimum [Member] | ||||||||
Long term debt [Line items] | ||||||||
Conversion price per share (in Dollars per share) | $ 24 | |||||||
Senior Convertible [Member] | Maximum [Member] | ||||||||
Long term debt [Line items] | ||||||||
Conversion price per share (in Dollars per share) | $ 95 | |||||||
Exchange Agreement [Member] | Senior Convertible [Member] | ||||||||
Long term debt [Line items] | ||||||||
Conversion price per share (in Dollars per share) | $ 10 | |||||||
Converted Common Stock [Member] | ||||||||
Long term debt [Line items] | ||||||||
Principal amount | $ 1,650,000 | |||||||
Common Stock [Member] | ||||||||
Long term debt [Line items] | ||||||||
Convertible notes settled in cash | $ 3,200,000 | |||||||
Settled in shares (in Shares) | 237,213 | |||||||
Series C Preferred Stock [Member] | ||||||||
Long term debt [Line items] | ||||||||
Convertible notes settled in cash | $ 3,400,000 | |||||||
Settled in shares (in Shares) | 3,422 | |||||||
Secured Promissory Note [Member] | Securities Purchase Agreement [Member] | ||||||||
Long term debt [Line items] | ||||||||
Simple interest | 10% | |||||||
MJ Acquisition [Member] | Secured Promissory Note [Member] | ||||||||
Long term debt [Line items] | ||||||||
Received amount | $ 1,000,000 |
Long Term Debt (Details) - Sche
Long Term Debt (Details) - Schedule of Long Term Debt - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Schedule of Long Term Debt [Abstract] | ||
Total long-term debt | $ 5,149,000 | $ 14,607,000 |
Less: current maturities | (5,149,000) | (13,200,000) |
Total long-term debt, less current portion | $ 1,407,000 |
Long Term Debt (Details) - Sc_2
Long Term Debt (Details) - Schedule of Maturities of debt - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Schedule of Maturities of debt [Abstract] | ||
Aggregate maturities due during the year ending December 31, 2024 | $ 3,136,271 | |
Maturities due for the Amended and Restated Secured Promissory Note during 2024 | 1,650,000 | |
Original issue discount | (2,000,000) | |
Cumulative unrealized change in fair value | 2,362,729 | |
Total debt outstanding | $ 5,149,000 | $ 13,200,000 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Taxes [Line Items] | |||
Valuation allowances | $ (3,591,436) | $ 7,501,917 | |
Net operating loss carryforwards | 59,500,000 | ||
Taxable income percentage | 80% | ||
Foreign NOL carryforwards | 56,739 | $ 4,641,293 | |
Income taxes, net of refunds received | 100,000 | ||
Internal Revenue Service (IRS) [Member] | |||
Income Taxes [Line Items] | |||
Reserve for potential penalties | $ 100,000 | ||
Tax Year 2034 [Member] | |||
Income Taxes [Line Items] | |||
Foreign NOL carryforwards | $ 200,000 |
Income Taxes (Details) - Schedu
Income Taxes (Details) - Schedule of Expense or (Benefit) for Income Taxes - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Current income tax expense (benefit) | ||
U.S. federal | $ (50,000) | |
U.S. state | 2,826 | |
Foreign | ||
Total current income taxes | (47,174) | |
Deferred income tax benefit | ||
U.S. federal | (653,945) | |
U.S. state | ||
Total deferred income benefit | (653,945) | |
Total income tax benefit | $ (701,119) |
Income Taxes (Details) - Sche_2
Income Taxes (Details) - Schedule of Statutory Federal Income Tax Rate to Actual Expense Based on Loss Before Income Taxes - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Income tax expense (benefit) attributable to: | ||
Federal | $ (2,406,564) | $ (16,749,778) |
State, net of federal benefit | (252,836) | (853,392) |
Foreign tax rate differential | (76,018) | (11,543) |
Transaction costs | 167,137 | |
Other permanent differences | 207,525 | 472,270 |
Goodwill impairment | 358,744 | 9,172,756 |
Rate changes | (51,003) | (992) |
Changes in valuation allowance | (3,591,436) | 7,501,917 |
Provision to return adjustment | 486,727 | 62,788 |
Deferred impact of subsidiary sales | 5,157,724 | (247,839) |
Other adjustments | (47,306) | |
Effective income tax expense (benefit) | $ (701,119) |
Income Taxes (Details) - Shedul
Income Taxes (Details) - Shedule of Deferred Income Tax Assets and Liabilities - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Noncurrent deferred tax assets: | ||
Employee compensation | $ 63,091 | $ 136,154 |
Debt issuance costs | 39,381 | |
Revenue recognition | 64,662 | |
Settlement accrual | 49,575 | 178,549 |
Fixed assets | 171,268 | 774,936 |
Section 174 capitalization | 1,219,926 | 1,121,311 |
Federal and state net operating loss | 14,226,635 | 13,860,338 |
Foreign net operating loss | 56,739 | 4,641,293 |
Other | 4,718 | 280,430 |
Total deferred tax assets | 15,791,952 | 21,097,054 |
Noncurrent deferred tax liabilities: | ||
Intangible assets | (1,713,666) | |
Total deferred tax liabilities | (1,713,666) | |
Valuation allowance | (15,791,952) | (19,383,388) |
Deferred tax asset (liability), net after valuation allowance |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Apr. 02, 2021 | Apr. 21, 2020 | |
Commitments and Contingencies (Details) [Line Items] | |||
Transaction percentage | 3% | ||
Accrued advisor | $ 650 | ||
TreCom Systems Group Inc [Member] | |||
Commitments and Contingencies (Details) [Line Items] | |||
Litigation reserve | $ 2,000 | ||
Loss contingency | 200 | ||
Sale Transaction and Merger [Member] | |||
Commitments and Contingencies (Details) [Line Items] | |||
Value of success fees | 1,500 | ||
Total value | $ 200 | ||
Paycheck Protection Loan [Member] | |||
Commitments and Contingencies (Details) [Line Items] | |||
PPP Loan received | $ 2,200 |
Stockholders_ Equity (Deficit_2
Stockholders’ Equity (Deficit) (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||||||||||
Jun. 14, 2023 | Oct. 04, 2022 | Sep. 28, 2022 | Sep. 23, 2022 | Jul. 05, 2022 | Jul. 31, 2020 | Sep. 30, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Feb. 09, 2024 | Dec. 20, 2023 | Dec. 14, 2023 | Nov. 10, 2022 | Nov. 09, 2022 | Oct. 05, 2022 | Jul. 29, 2022 | Dec. 31, 2019 | Jun. 17, 2019 | |
Class of Stock [Line Items] | |||||||||||||||||||
Common Stock, shares authorized | 150,000,000 | 150,000,000 | |||||||||||||||||
Common stock, par value per share (in Dollars per share) | $ 0.0001 | $ 0.0001 | |||||||||||||||||
Shares issued | 114,130 | ||||||||||||||||||
Termination fee and related expenses (in Dollars) | $ 200 | ||||||||||||||||||
Stated value per share (in Dollars per share) | $ 10 | $ 10.5 | |||||||||||||||||
Original issue discount to the stated value percentage. | 5% | ||||||||||||||||||
Gross proceeds (in Dollars) | $ 4,750 | ||||||||||||||||||
Fees and offering expenses (in Dollars) | 400 | ||||||||||||||||||
Professional and legal fees (in Dollars) | 100 | ||||||||||||||||||
Escrow deposit (in Dollars) | $ 500 | $ 5,250 | |||||||||||||||||
Conversion price per share (in Dollars per share) | $ 5 | ||||||||||||||||||
Convertible Redeemable Preferred Stock percent | 105% | ||||||||||||||||||
Power equivalent | 517,605 | 230,140 | |||||||||||||||||
Senior convertible notes received | 3,422 | ||||||||||||||||||
Principal amount of senior convertible notes (in Dollars) | $ 3,422 | ||||||||||||||||||
Total exchangeable shares | 248,484 | ||||||||||||||||||
Total shares of common stock | 1,711 | ||||||||||||||||||
Exercise price (in Dollars per share) | $ 92 | ||||||||||||||||||
Net proceeds (in Dollars) | $ 9,200 | ||||||||||||||||||
Restricted cash (in Dollars) | $ 7,000 | ||||||||||||||||||
Warrants outstanding | 45,652,174 | ||||||||||||||||||
Warrants shares | 43,478,261 | ||||||||||||||||||
Common stock shares issued | 1,040,038 | ||||||||||||||||||
Additional paid-in capital (in Dollars) | $ 9,200 | ||||||||||||||||||
Warrants description | In connection with MTech’s initial public offering, MTech sold units consisting of one share of MTech’s common stock and one warrant of MTech (“MTech Public Warrant”). Each MTech Public Warrant entitled the holder to purchase one share of MTech’s common stock. Concurrently with MTech’s initial public offering, MTech sold additional units on a private offering basis. Each of these units consisted of one share of MTech’s common stock and one warrant of MTech (“MTech Private Warrant”). | ||||||||||||||||||
2022 Unit Offering | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Unit offering description | (i) 29,382,861 units consisting of 73,457 shares of Common Stock together with Common Stock warrants (the “Common Warrants”) to purchase up to 73,457 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 35,239 shares of Common Stock, together with Common Warrants to purchase up to 35,239 shares of Common Stock (together, the “Pre-funded Units”). The Units were sold at a public offering price of $92.00 per unit and the Pre-funded Units were sold at a public offering price of $91.96 per pre-funded unit. | ||||||||||||||||||
Common Stock [Member] | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Common Stock, shares authorized | 150,000,000 | ||||||||||||||||||
Common stock, par value per share (in Dollars per share) | $ 0.0001 | ||||||||||||||||||
Vote per share | one | ||||||||||||||||||
Senior convertible notes received | 756,746 | ||||||||||||||||||
Exchange shares | 93 | 59 | |||||||||||||||||
Total exchangeable shares | 621 | ||||||||||||||||||
Common stock shares issued | 73,457 | ||||||||||||||||||
Purchase share | 1 | ||||||||||||||||||
Preferred Stock [Member] | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Preferred stock, shares authorized | 5,000,000 | ||||||||||||||||||
Preferred stock, par value per share (in Dollars per share) | $ 0.0001 | ||||||||||||||||||
Special Voting Preferred Stock | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Special voting preferred stock | one | ||||||||||||||||||
Pre Funded Warrants [Member] | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Exercise price (in Dollars per share) | $ 0.04 | ||||||||||||||||||
Underwriter Warrants [Member] | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Exchange shares | 108,696 | ||||||||||||||||||
Exercisable expire | 5 years | ||||||||||||||||||
Effective date | Jun. 29, 2022 | ||||||||||||||||||
Number of shares issued | 114,130 | ||||||||||||||||||
Underwriter Warrants [Member] | Minimum [Member] | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Exercise price (in Dollars per share) | $ 11 | ||||||||||||||||||
Warrants purchase shares | 5,435 | ||||||||||||||||||
Underwriter Warrants [Member] | Maximum [Member] | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Exercise price (in Dollars per share) | $ 9.2 | ||||||||||||||||||
Common Warrant [Member] | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Exercise price (in Dollars per share) | $ 70.36 | ||||||||||||||||||
Warrants shares | 108,696 | ||||||||||||||||||
Warrant [Member] | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Purchase share | 35,239 | ||||||||||||||||||
Number of shares issued | 400 | ||||||||||||||||||
Public Warrants And Private Warrants 2019 [Member] | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Exchange ratio | one-for-one | ||||||||||||||||||
Private Placement [Member] | Common Stock [Member] | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Shares issued | 50,000,000,000 | ||||||||||||||||||
Investor per share (in Dollars per share) | $ 10 | ||||||||||||||||||
Total cash proceeds (in Dollars) | $ 500 | ||||||||||||||||||
A T M Program [Member] | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Shares issued | 4,540 | ||||||||||||||||||
Pursuant to offer and sell (in Dollars) | $ 20,000 | $ 25,000 | |||||||||||||||||
Aggregate gross purchase price (in Dollars) | $ 800 | ||||||||||||||||||
Gross proceeds percentage | 3% | ||||||||||||||||||
Total shares of common stock | 27,607 | ||||||||||||||||||
Aggregate market value (in Dollars) | $ 75,000 | ||||||||||||||||||
A T M Program [Member] | Common Stock [Member] | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Shares issued | 5,931 | ||||||||||||||||||
Aggregate gross purchase price (in Dollars) | $ 2,700 | ||||||||||||||||||
Warrant [Member] | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Stated value per share (in Dollars per share) | $ 70.36 | ||||||||||||||||||
Exercisable expire | 5 years | ||||||||||||||||||
Number of shares issued | 400 | ||||||||||||||||||
Warrants [Member] | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Exercise price (in Dollars per share) | $ 70.36 | ||||||||||||||||||
Common Stock [Member] | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Number of shares issued | 1 | ||||||||||||||||||
Investor per share (in Dollars per share) | $ 4,600 | ||||||||||||||||||
Total shares of common stock | 100 | ||||||||||||||||||
Warrants purchase shares | 5,435 | ||||||||||||||||||
Purchase share | 1 | ||||||||||||||||||
Common Stock [Member] | Underwriter Warrants [Member] | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Exercise price (in Dollars per share) | $ 92 | ||||||||||||||||||
Common Stock [Member] | A T M Program [Member] | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Aggregate gross purchase price (in Dollars) | $ 1,100 | ||||||||||||||||||
Series A Convertible Redeemable Preferred Stock [Member] | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Preferred stock, shares authorized | 400,000 | ||||||||||||||||||
Preferred stock, par value per share (in Dollars per share) | $ 0.0001 | ||||||||||||||||||
Series B Convertible Redeemable Preferred Stock [Member] | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Preferred stock, shares authorized | 100,000 | ||||||||||||||||||
Preferred stock, par value per share (in Dollars per share) | $ 0.0001 | ||||||||||||||||||
Convertible Redeemable Preferred Stock [Member] | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Stated value per share (in Dollars per share) | $ 9.5 | ||||||||||||||||||
Series C Preferred Stock [Member] | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Preferred stock, shares authorized | 3,422 | 3,422 | 3,244 | ||||||||||||||||
Preferred stock, par value per share (in Dollars per share) | $ 1,000 | $ 1,000 | $ 1,000 | ||||||||||||||||
Power equivalent | 2,000 | ||||||||||||||||||
Senior convertible notes received | 1,711 | ||||||||||||||||||
Principal amount of senior convertible notes (in Dollars) | $ 1,711 | ||||||||||||||||||
Total shares of common stock | 3,422 | ||||||||||||||||||
Ample Exchangeable Share [Member] | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Shares issued | 3,294,574 | ||||||||||||||||||
Exchangeable shares value (in Dollars) | $ 300 | $ 200 | |||||||||||||||||
Exchange shares | 37,188 | 23,614 | |||||||||||||||||
Special Voting Preferred Stock | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Preferred stock, shares authorized | 1 | 1 | |||||||||||||||||
Preferred stock, par value per share (in Dollars per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||||||||||||||
Preference liquidation (in Dollars per share) | $ 1 | $ 1 | $ 1 | ||||||||||||||||
Common Class A [Member] | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Purchase share | 1 | ||||||||||||||||||
Public Warrants [Member] | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Class Of Warrant Or Right Number Of Securities Exerciables. | 14,535 | ||||||||||||||||||
Subsequent Event [Member] | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Total shares of common stock | 446,611 | ||||||||||||||||||
Subsequent Event [Member] | Common Stock [Member] | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Common stock, par value per share (in Dollars per share) | $ 0.0001 | ||||||||||||||||||
Subsequent Event [Member] | Series C Preferred Stock [Member] | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Senior convertible notes received | 3,244 | ||||||||||||||||||
Mtech [Member] | Mtech Private Warrant [Member] | Common Stock [Member] | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Purchase share | 1 |
Stockholders_ Equity (Deficit_3
Stockholders’ Equity (Deficit) (Details) - Schedule of Warrants Outstanding - $ / shares | 12 Months Ended | ||
Dec. 31, 2023 | Jul. 05, 2022 | ||
Class of Warrant or Right [Line Items] | |||
Exercise Price (in Dollars per share) | $ 92 | ||
Beginning balance, outstanding | 51,465,978 | ||
Issued | |||
Exercised (in Dollars per share) | |||
Expired (in Dollars per share) | |||
Ending balance, outstanding | 51,465,978 | ||
2019 Public Warrants [Member] | |||
Class of Warrant or Right [Line Items] | |||
Exercise Price (in Dollars per share) | [1] | $ 4,600 | |
Expiration Date | [1] | Jun. 19, 2024 | |
Beginning balance, outstanding | [1] | 5,813,804 | |
Issued | [1] | ||
Exercised (in Dollars per share) | [1] | ||
Expired (in Dollars per share) | [1] | ||
Ending balance, outstanding | [1] | 5,813,804 | |
Common Warrants [Member] | 2022 Unit Offering [Member] | |||
Class of Warrant or Right [Line Items] | |||
Exercise Price (in Dollars per share) | [2] | $ 70.36 | |
Expiration Date | [2] | Jun. 29, 2027 | |
Beginning balance, outstanding | [2] | 43,478,261 | |
Issued | [2] | ||
Exercised (in Dollars per share) | [2] | ||
Expired (in Dollars per share) | [2] | ||
Ending balance, outstanding | [2] | 43,478,261 | |
Underwriter Warrants [Member] | 2022 Unit Offering [Member] | |||
Class of Warrant or Right [Line Items] | |||
Exercise Price (in Dollars per share) | [2] | $ 70.36 | |
Expiration Date | [2] | Jun. 29, 2027 | |
Beginning balance, outstanding | [2] | 2,173,913 | |
Issued | [2] | ||
Exercised (in Dollars per share) | [2] | ||
Expired (in Dollars per share) | [2] | ||
Ending balance, outstanding | [2] | 2,173,913 | |
[1] The 2019 Public Warrants are exercisable for 14,535 shares of Common Stock at $4,600.00 per share or a ratio of 400 warrants for one share of Common Stock. The Common Warrants and Underwriter Warrants are exercisable for a combined amount of 114,130 shares of Common Stock at $70.36 per share or a ratio of 400 warrants for one share of Common Stock. |
Stock-Based Compensation and _3
Stock-Based Compensation and Other Benefit Plans (Details) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | |||
May 31, 2022 | Jun. 30, 2020 | Dec. 31, 2023 | Dec. 31, 2022 | Jun. 17, 2019 | |
Stock-Based Compensation and Other Benefit Plans [Line Items] | |||||
Common stock reserved | 1,040,038 | ||||
Shares authorized for issuance | 2,934,962 | 525,000 | 8,714 | ||
Adjusted number of shares authorized for issuance | 11,250 | ||||
Stock-based compensation expense recognized (in Dollars) | $ 0.1 | ||||
Compensation cost capitalized (in Dollars) | 0.1 | ||||
Unrecognized costs (in Dollars) | $ 0.3 | ||||
Weighted average remaining vesting period | 10 months 13 days | ||||
RSUs [Member] | |||||
Stock-Based Compensation and Other Benefit Plans [Line Items] | |||||
Shares authorized for issuance | 4,500,000 | ||||
Stock-based compensation expense recognized (in Dollars) | $ 0.4 | $ 0.9 |
Stock-Based Compensation and _4
Stock-Based Compensation and Other Benefit Plans (Details) - Schedule of Unvested Restricted Shares and RSUs Activity - $ / shares | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Beginning balance, unvested | 570 | 1,790 |
Beginning balance, unvested (in Dollars per share) | $ 1,793.2 | $ 2,188 |
Granted | 707 | |
Granted (in Dollars per share) | $ 270.8 | |
Vested | (276) | (1,188) |
Vested (in Dollars per share) | $ 2,045.8 | $ 1,081.2 |
Forfeited | (113) | (739) |
Forfeited (in Dollars per share) | $ 1,372.4 | $ 2,248.2 |
Ending balance, unvested | 181 | 570 |
Ending balance, unvested (in Dollars per share) | $ 1,801 | $ 1,793.2 |
Restricted Shares [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Beginning balance, unvested | 17 | 81 |
Granted | ||
Vested | (17) | (64) |
Forfeited | ||
Ending balance, unvested | 17 | |
Restricted Stock Units (RSUs) [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Beginning balance, unvested | 553 | 1,709 |
Granted | 707 | |
Vested | (259) | (1,124) |
Forfeited | (113) | (739) |
Ending balance, unvested | 181 | 553 |
Fair Value (Details)
Fair Value (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2022 |
Fair Value [Abstract] | |||
Earn out obligation | $ 6.3 | $ 2.3 | $ 3 |
Fair Value (Details) - Schedule
Fair Value (Details) - Schedule of Fair Value Categorized Within Level 3 of the Fair Value Hierarchy - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Schedule of Fair Value Categorized within Level 3 of the Fair Value Hierarchy [Abstract] | ||
Fair value balance at beginning of period | $ 14,607,000 | $ 17,305,000 |
Principal payments in cash and Common Stock | (11,526,457) | (5,337,273) |
Change in fair value reported in the statements of operations | 370,457 | 2,884,273 |
Change in fair value reported in other comprehensive income(loss) | 48,000 | (245,000) |
Fair value balance at end of period | $ 3,499,000 | $ 14,607,000 |
Schedule of Fair Value by Using
Schedule of Fair Value by Using Key Inputs (Details) - Schedule of Fair Value by Using Key Inputs | 12 Months Ended | |
Dec. 31, 2023 USD ($) $ / shares | Dec. 31, 2022 USD ($) $ / shares | |
Convertible Debts [Member] | ||
Schedule of Fair Value by Using Key Inputs (Details) - Schedule of Fair Value by Using Key Inputs [Line Items] | ||
Debt Instrument, Face Amount (in Dollars) | $ | $ 3,136,271 | $ 14,662,727 |
Stockholders' Equity Note, Stock Split, Conversion Ratio | 95 | 95 |
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Expected Term | 9 months 18 days | 1 year 9 months 18 days |
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Expected Volatility Rate | 96% | 77% |
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Risk Free Interest Rate | 4.10% | 4.40% |
Option Indexed to Issuer's Equity, Settlement Date | Oct. 05, 2021 | Oct. 05, 2021 |
Debt Instrument, Maturity Date | Oct. 05, 2024 | Oct. 05, 2024 |
Convertible Debts [Member] | Minimum [Member] | ||
Schedule of Fair Value by Using Key Inputs (Details) - Schedule of Fair Value by Using Key Inputs [Line Items] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Weighted Average Volatility Rate | 38.20% | 43.90% |
Senior Convertible Notes [Member] | ||
Schedule of Fair Value by Using Key Inputs (Details) - Schedule of Fair Value by Using Key Inputs [Line Items] | ||
Value of Common Stock (in Dollars per share) | $ / shares | $ 8.8 | $ 13.8 |
Senior Convertible Notes [Member] | Maximum [Member] | ||
Schedule of Fair Value by Using Key Inputs (Details) - Schedule of Fair Value by Using Key Inputs [Line Items] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Weighted Average Volatility Rate | 38.40% | 44.30% |
Fair Value (Details) - Schedu_2
Fair Value (Details) - Schedule of Reconciliation of the Fair Values - Level 3 [Member] - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Schedule of Reconciliation of the Fair Values [Line Items] | ||
Fair value balance at beginning of period | $ 63,178 | |
Change in fair value reported in the statements of operations | (63,178) | |
Fair value balance at end of period |
Fair Value (Details) - Schedu_3
Fair Value (Details) - Schedule of Fair Value by Using Key Inputs - Private Warrants [Member] | 12 Months Ended | |
Dec. 31, 2023 $ / shares shares | Dec. 31, 2022 $ / shares shares | |
Schedule of Fair Value by Using Key Inputs [Line Items] | ||
Number of Private Warrants (in Shares) | shares | 225,635 | 225,635 |
Exercise price, as adjusted for the Reverse Stock Split | 4,600 | 4,600 |
Value of Common Stock on measurement date (in Dollars per share) | $ / shares | $ 8.8 | $ 13.8 |
Measurement Input, Expected Term [Member] | ||
Schedule of Fair Value by Using Key Inputs [Line Items] | ||
Warrants and Rights Outstanding Measurement Input | 0.46 | 1.46 |
Measurement Input, Price Volatility [Member] | ||
Schedule of Fair Value by Using Key Inputs [Line Items] | ||
Warrants and Rights Outstanding Measurement Input | ||
Measurement Input, Risk Free Interest Rate [Member] | ||
Schedule of Fair Value by Using Key Inputs [Line Items] | ||
Warrants and Rights Outstanding Measurement Input |
Fair Value (Details) - Schedu_4
Fair Value (Details) - Schedule of Fair Value Measurement Unit Offering Common and Underwriter Warrants - Fair Value, Inputs, Level 3 [Member] | Jul. 05, 2022 $ / shares |
Schedule of Fair Value Measurement Unit Offering Common and Underwriter Warrants [Line Items] | |
Exercise price as adjusted for the Reverse Stock Split (in Dollars per share) | $ 70.36 |
Measurement Input, Expected Term [Member] | |
Schedule of Fair Value Measurement Unit Offering Common and Underwriter Warrants [Line Items] | |
Derivative Liability Measurement Input | 5 |
Measurement Input, Price Volatility [Member] | |
Schedule of Fair Value Measurement Unit Offering Common and Underwriter Warrants [Line Items] | |
Derivative Liability Measurement Input | 136.9 |
Loss Per Share (Details) - Sche
Loss Per Share (Details) - Schedule of Diluted Earnings Per Share - shares | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Schedule of Diluted Earnings Per Share [Line Items] | ||
Total | 162,483 | 284,296 |
Shares issuable upon the exchange of Exchangeable Shares [Member] | ||
Schedule of Diluted Earnings Per Share [Line Items] | ||
Total | 621 | 714 |
2019 Public Warrants [Member] | ||
Schedule of Diluted Earnings Per Share [Line Items] | ||
Total | 14,535 | 14,535 |
2022 Unit Offering - Common Warrants [Member] | ||
Schedule of Diluted Earnings Per Share [Line Items] | ||
Total | 108,696 | 108,696 |
2022 Unit Offering - Underwriter Warrants [Member] | ||
Schedule of Diluted Earnings Per Share [Line Items] | ||
Total | 5,435 | 5,435 |
Unvested Restricted Stock Units [Member] | ||
Schedule of Diluted Earnings Per Share [Line Items] | ||
Total | 182 | 554 |
Unvested Restricted Stock Awards [Member] | ||
Schedule of Diluted Earnings Per Share [Line Items] | ||
Total | 17 | |
Shares issuable upon conversion of the Senior Convertible Notes [Member] | ||
Schedule of Diluted Earnings Per Share [Line Items] | ||
Total | 33,014 | 154,345 |
Discontinued Operations (Detail
Discontinued Operations (Details) - USD ($) | 12 Months Ended | |||
Jan. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | |
Discontinued Operations (Details) [Line Items] | ||||
Cash proceeds on termination | $ 500,000 | $ 2,283,806 | ||
Earn-out obligation | $ 2,300,000 | 2,300,000 | ||
Original estimate | 4,000,000 | |||
Cash proceeds | $ 100,000 | |||
Gain loss sale of discontinued operations | 200,000 | |||
Cash proceeds | 638,000 | |||
Impairments of long-lived assets | 3,100,000 | 35,200,000 | ||
Goodwill | 25,000,000 | 1,700,000 | 25,000,000 | |
Intangible assets | 9,900,000 | 9,900,000 | ||
Capitalized software | 300,000 | |||
Debt expense | 1,700,000 | |||
Non-cash reduction value | 940,000 | |||
Accrued expenses | $ 200,000 | 200,000 | ||
Common Stock [Member] | ||||
Discontinued Operations (Details) [Line Items] | ||||
Common stock shares | 13,988 | |||
Ample [Member] | ||||
Discontinued Operations (Details) [Line Items] | ||||
Gain loss sale of discontinued operations | 100,000 | |||
Capital expenditures | 12,400,000 | |||
365 Cannabis [Member] | ||||
Discontinued Operations (Details) [Line Items] | ||||
Capital expenditures | 22,200,000 | |||
LCA [Member] | ||||
Discontinued Operations (Details) [Line Items] | ||||
Capital expenditures | 600,000 | |||
Discontinued Operations [Member] | ||||
Discontinued Operations (Details) [Line Items] | ||||
Non-cash reduction value | $ 900,000 | |||
365 Cannabis [Member] | ||||
Discontinued Operations (Details) [Line Items] | ||||
Intangible assets | $ 1,400,000 |
Discontinued Operations (Deta_2
Discontinued Operations (Details) - Schedule of Assets and Liabilities of the Disposal Group - Discontinued Operations [Member] - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Discontinued Operations (Details) - Schedule of Assets and Liabilities of the Disposal Group [Line Items] | ||
Cash and restricted cash | $ 305,411 | |
Accounts receivable, net | 357,121 | |
Prepaid expenses & other current assets | 666,252 | |
Fixed assets | 63,764 | |
Capitalized software, net | 1,483,111 | |
Intangible assets, net | 5,406,094 | |
Goodwill | 1,708,303 | |
Total assets | 9,990,056 | |
Accounts payable, accrued expenses and other current liabilities | 1,437,661 | |
Deferred revenue | 994,713 | |
Deferred revenue, noncurrent | 217,083 | |
Total liabilities | 2,649,457 | |
Current assets of discontinued operations | 1,328,784 | |
Noncurrent assets of discontinued operations | 8,661,272 | |
Total assets of discontinued operations | 9,990,056 | |
Current liabilities of discontinued operations | 2,432,374 | |
Noncurrent liabilities of discontinued operations | 217,083 | |
Total liabilities of discontinued operations | $ 2,649,457 |
Discontinued Operations (Deta_3
Discontinued Operations (Details) - Schedule of Operations of the Disposal Group - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Schedule of Operations of the Disposal Group [Abstract] | ||
Revenue | $ 2,412,534 | $ 12,640,170 |
Cost of revenue | 575,246 | 2,919,208 |
Gross profit | 1,837,288 | 9,720,962 |
Research and development | 527,301 | 2,409,740 |
Sales and marketing | 421,049 | 4,646,997 |
General and administrative | 118,133 | 798,837 |
Depreciation and amortization | 891,708 | 3,412,717 |
Impairment of long-lived assets | 3,065,365 | 35,249,975 |
Changes in fair value of contingent consideration | (4,016,194) | |
Other expense, net | 1,833 | |
Interest expense | 746 | |
Loss from discontinued operations before income taxes | (3,188,101) | (32,781,856) |
Income tax benefit | 2,117 | |
Loss from discontinued operations, net of tax | (3,188,101) | (32,779,739) |
Gain on sale of discontinued operations, net of tax | 212,601 | |
Net loss from discontinued operations, net of tax | $ (2,975,500) | $ (32,779,739) |