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 (“ASC 205-40”), we assess going concern uncertainty in our consolidated financial statements to determine if we have sufficient cash, cash equivalents and working capital on hand and any available borrowings on loans, to operate for a period of at least one year from the date the consolidated financial statements are issued, which is defined as the “look-forward period” in ASC 205-40. As part of this assessment, based on conditions that are known and reasonably knowable to us, we will consider various scenarios, forecasts, projections, estimates and will make certain key assumptions, including the timing and nature of projected cash expenditures or programs, and our ability to delay or curtail expenditures or programs, if necessary, among other factors. Based on this assessment, as necessary or applicable, we make certain assumptions regarding implementing curtailments or delays in the nature and timing of programs and expenditures to the extent we deem probable that such implementations can be achieved and we have the proper authority to execute them within the look-forward period in accordance with ASC 205-40.

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.