Helix Technologies Inc. (fka HLIX)

[NobleRoman]

Akerna's Problems come to Surface

I knew she was maniulative. The queen of Carthage. Today, the gap has narrowed. HLIX's surface market cap is now $14M. Although, the integrity of that number is highly questionable with the runaway dilution going on. And we have a higher market cap today with a lower price because of dilution. Pardon me if I'm a little pissed.

KERN's market cap has dropped to a surface reading of $68M. They are coming close to their 52 week low, as they closed at $4.88 today. Actually, I'm not even sure they've been trading a full 52 weeks yet. Seems, things are not as rosy as Jessica likes to paint them.

https://www.newcannabisventures.com/ample-organics-founder-departs-akerna-shortly-after-acquisition-closes/

They have a revolving door too it appears. Founders sell, then sell out. Not a very inspirational group of leaders in the industry. This one is bad mouthing Jessica in public, however:

Prentice, who founded Ample Organics in 2014, announced his resignation in a public statement, making it clear that he had become disillusioned with senior management’s execution and abilities, suggesting that CEO Jessica Billingsley resign:

Remember, this #@%Ch sold shares worth $1M at $10.00. On a shady SPAC with low float because of restricted shares. Holding people hostage as she sells. Unlike our fearless leaders that trample over themselves as they rush to the exit.

Akerna (NASDAQ: KERN), parent of MJ Freeway, less than two months after his company was acquired in a deal that was originally announced in December. The acquisition, valued at up to C$60 million (US$45 million at the time it was announced), consisted of mainly stock, with a small amount of cash at closing as well as an earn-out to be paid in stock contingent upon certain revenue targets being achieved.

And you know it wasn't worth $60M. This article was written by the confused analyst, Alan himself. And all those restricted shares used to purchase this company are being held hostage as the company says, "Acquisitions can be tricky when merging two sets of teams, technologies, and culture." That would be the indigestion I was hoping for as I said it's hard to integrate. Most companies find themselves with a bad case of indigestion. Especially if it's a minnow swallowing a whale.

As I said before, by Summer of 2021, I think the market caps will converge. That could happen a number of ways, but I definitely would not be surprised see KERN coming down to these levels. Although, with our runaway dilution, if the trend continues, we may be priced even more expensively than KERN but at at one cent. Which would be a self-defeating purpose in life. Just based on sheer share count alone. Which would be the way James Tilton likes to run his fake companies. This one is a real company, so I hope that's not the path forward. If so, Janjic and Garvis can eat crow and rightly so.

Pence's Resignation Letter in His Own Words:

https://johnprentice.ca/ample/

I am immensely disappointed today to announce my resignation from Ample Organics. For each of you who were part of this wonderful and life-changing journey over the past six years, please accept my most sincere thanks. I appreciate you more than you know.

We sold Ample to Akerna last year because we fell for the same promise Akerna made to stockholders when announcing the acquisition. CEO Jessica Billingsley promised that they had a "vision to create the preeminent global (cannabis) technology platform, addressing the entire supply chain and its regulatory bodies through accountability and transparency."

As all too often happens with companies like Akerna, it never had the vision or executive leadership to deliver on this promise, or many others. After deep reflection on the cannabis industry's evolution, and the type of commitment to planning and execution required to lead that evolution, I came to believe that Akerna's executive leadership is incapable of taking us there successfully.

I will have more to say in coming days and months, but suffice to say that I believe Akerna's current leadership is unlikely to make it a preeminent leader of anything. Except, possibly, serial layoffs, customer and revenue churn and dilutive deals that are bad for investors -- all of which are currently happening there.

Software-as-a-Service (SaaS) companies enjoy an exalted spot in our economy because of their business model simplicity and the value of their recurring revenue streams. When you have successfully acquired a significant customer base, as Akerna has, your job is to faithfully safeguard your investors' money and make it grow by continuing to deliver products and services customers want, engaging those customers, delighting them, and repeating. But when you call yourself a SaaS company to get that elevated valuation then turn around and disappoint customers, fail to capture acquisition synergies, or even to manage the company like a SaaS company, it is wrong. You can see for yourselves. I challenge anyone to look at Akerna's quarterly or annual reports and find even one instance where they explain to investors that they understand, manage or report on generally-accepted SaaS metrics like churn, LTV, CAC, CAC:LTV ratio and the like. You won't find it because they don't do it.

Failures like this begin at the top. Akerna has some great employees, it has awesome customers, and, with the right leadership, has massive potential. Unfortunately, I do not believe its current executive leadership has any likelihood of nurturing those employees, effectively serving those customers or capturing much of that potential.

After our transaction, each time I raised these issues internally I was rebuffed, and as a part of my final conversation with Jessica Billingsley, I politely requested that she do the right thing and resign her position as CEO. I asked that a rigorous search be started to find a candidate with the requisite experience and skills to lead this company forward and to correct a decade of bad decisions. She declined to do so.

While I may have resigned, I have not given up on my belief in Ample Organics and the potential of Akerna, and I intend to use every resource available to me to make sure that potential is realized.

Sincerely,


John X. Prentice