UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
| x | Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 | |
| For the quarterly period ended September 30, 2023 | ||
| o | Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 | |
| For the transition period from ________ to ________. | ||
Commission file number 1-12711
AULT ALLIANCE, INC.
(Exact name of registrant as specified in its charter)
| Delaware | 94-1721931 |
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) |
11411 Southern Highlands Pkwy #240
Las Vegas, NV 89141
(Address of principal executive offices) (Zip code)
(949) 444-5464
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| Class A Common Stock, $0.001 par value | AULT | NYSE American | ||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding year (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Date File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer o | Accelerated filer o |
| Non-accelerated filer x | Smaller reporting company x |
| Emerging growth company o |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x
At November 17, 2023, the registrant had outstanding shares of common stock.
AULT ALLIANCE, INC.
TABLE OF CONTENTS
Forward-Looking Statements
This Quarterly Report on Form 10-Q contains forward-looking statements that involve a number of risks and uncertainties. Words such as “anticipates,” “expects,” “intends,” “goals,” “plans,” “believes,” “seeks,” “estimates,” “continues,” “may,” “will,” “would,” “should,” “could,” and variations of such words and similar expressions are intended to identify such forward-looking statements. In addition, any statements that refer to projections of our future financial performance, our anticipated growth and trends in our businesses, uncertain events or assumptions, and other characterizations of future events or circumstances are forward-looking statements. Such statements are based on management’s expectations as of the date of this filing and involve many risks and uncertainties that could cause our actual results to differ materially from those expressed or implied in our forward-looking statements. Such risks and uncertainties include those described throughout this report and our Annual Report on Form 10-K for the year ended December 31, 2022, as amended, particularly the “Risk Factors” sections of such reports. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements in this Form 10-Q do not reflect the potential impact of any divestitures, mergers, acquisitions, or other business combinations that had not been completed as of the date of filing of this Quarterly Report on Form 10-Q. In addition, the forward-looking statements in this Form 10-Q are made as of the date of this filing, and we do not undertake, and expressly disclaim any duty to update such statements, whether as a result of new information, new developments or otherwise, except to the extent that disclosure may be required by law.
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements.
AULT ALLIANCE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| F-1 |
AULT ALLIANCE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (continued)
(Unaudited)
| September 30, | December 31, | |||||||
| 2023 | 2022 | |||||||
| LONG TERM LIABILITIES | ||||||||
| Operating lease liability, non-current | 8,697,000 | 5,836,000 | ||||||
| Notes payable | 21,211,000 | 29,831,000 | ||||||
| Convertible notes payable | 9,453,000 | 11,451,000 | ||||||
| Deferred underwriting commissions of Ault Disruptive Technologies Corporation (“Ault Disruptive”) subsidiary | 3,450,000 | 3,450,000 | ||||||
| Noncurrent liabilities of discontinued operations | 61,633,000 | |||||||
| TOTAL LIABILITIES | 257,218,000 | 337,526,000 | ||||||
| COMMITMENTS AND CONTINGENCIES | ||||||||
| Redeemable noncontrolling interests in equity of subsidiaries | 2,179,000 | |||||||
| STOCKHOLDERS’ EQUITY | ||||||||
| Series A Convertible Preferred Stock, $ stated value per share, $ par value – shares authorized; shares issued and outstanding at September 30, 2023 and December 31, 2022 (liquidation preference of $176,000 as of September 30, 2023 and December 31, 2022) | ||||||||
| Series B Convertible Preferred Stock, $ stated value per share, share, $ par value – shares authorized; shares issued and outstanding at September 30, 2023 and December 31, 2022 (liquidation preference of $1,190,000 at September 30, 2023 and December 31, 2022) | ||||||||
| Series D Cumulative Redeemable Perpetual Preferred Stock, $ stated value per share, $ par value – shares authorized; shares authorized, shares and shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively (liquidation preference of $10,630,000 and $4,321,000 as of September 30, 2023 and December 31, 2022, respectively) | ||||||||
| Class A Common Stock, $ par value – shares authorized; and shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively | 12,000 | 1,000 | ||||||
| Class B Common Stock, $ par value – shares authorized; shares issued and outstanding at September 30, 2023 and December 31, 2022 | ||||||||
| Additional paid-in capital | 589,279,000 | 565,904,000 | ||||||
| Accumulated deficit | (467,088,000 | ) | (329,078,000 | ) | ||||
| Accumulated other comprehensive loss | (2,102,000 | ) | (1,100,000 | ) | ||||
| Treasury stock, at cost | (30,540,000 | ) | (29,235,000 | ) | ||||
| TOTAL AULT ALLIANCE STOCKHOLDERS’ EQUITY | 89,561,000 | 206,492,000 | ||||||
| Non-controlling interest | 29,498,000 | 17,496,000 | ||||||
| TOTAL STOCKHOLDERS’ EQUITY | 119,059,000 | 223,988,000 | ||||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 378,456,000 | $ | 561,514,000 | ||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| F-2 |
AULT ALLIANCE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(Unaudited)
| For the Three Months Ended | For the Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| Revenue | $ | 28,164,000 | $ | 27,031,000 | $ | 54,594,000 | $ | 43,539,000 | ||||||||
| Revenue, cryptocurrency mining | 7,558,000 | 3,874,000 | 23,273,000 | 11,398,000 | ||||||||||||
| Revenue, crane operations | 12,490,000 | 37,726,000 | ||||||||||||||
| Revenue, lending and trading activities | (249,000 | ) | 13,360,000 | 4,337,000 | 32,224,000 | |||||||||||
| Total revenue | 47,963,000 | 44,265,000 | 119,930,000 | 87,161,000 | ||||||||||||
| Cost of revenue, products | 20,425,000 | 20,193,000 | 39,248,000 | 30,985,000 | ||||||||||||
| Cost of revenue, cryptocurrency mining | 10,228,000 | 5,255,000 | 28,057,000 | 12,206,000 | ||||||||||||
| Cost of revenue, crane operations | 7,642,000 | 22,671,000 | ||||||||||||||
| Cost of revenue, lending and trading activities | 1,180,000 | |||||||||||||||
| Total cost of revenue | 38,295,000 | 25,448,000 | 91,156,000 | 43,191,000 | ||||||||||||
| Gross profit | 9,668,000 | 18,817,000 | 28,774,000 | 43,970,000 | ||||||||||||
| Operating expenses | ||||||||||||||||
| Research and development | 1,769,000 | 521,000 | 5,415,000 | 1,945,000 | ||||||||||||
| Selling and marketing | 8,034,000 | 7,428,000 | 26,405,000 | 20,888,000 | ||||||||||||
| General and administrative | 17,760,000 | 15,362,000 | 59,540,000 | 44,357,000 | ||||||||||||
| Impairment of goodwill and intangible assets | 35,570,000 | |||||||||||||||
| Impairment of property and equipment | 3,895,000 | 3,895,000 | ||||||||||||||
| Impairment of deposit due to vendor bankruptcy filing | 2,000,000 | 2,000,000 | ||||||||||||||
| Impairment of mined cryptocurrency | 113,000 | 515,000 | 376,000 | 2,930,000 | ||||||||||||
| Total operating expenses | 31,571,000 | 25,826,000 | 131,201,000 | 72,120,000 | ||||||||||||
| Loss from operations | (21,903,000 | ) | (7,009,000 | ) | (102,427,000 | ) | (28,150,000 | ) | ||||||||
| Other income (expense): | ||||||||||||||||
| Interest and other income | 309,000 | 725,000 | 3,888,000 | 1,255,000 | ||||||||||||
| Interest expense | (4,414,000 | ) | (2,367,000 | ) | (30,537,000 | ) | (32,063,000 | ) | ||||||||
| Loss on extinguishment of debt | (1,546,000 | ) | (1,700,000 | ) | ||||||||||||
| Realized and unrealized (loss) gain on marketable securities | 74,000 | 709,000 | (170,000 | ) | 1,016,000 | |||||||||||
| Loss from investment in unconsolidated entity | (924,000 | ) | ||||||||||||||
| Impairment of equity securities | (9,555,000 | ) | ||||||||||||||
| (Loss) gain on the sale of fixed assets | (33,000 | ) | 2,728,000 | |||||||||||||
| Change in fair value of warrant liability | (562,000 | ) | (3,000 | ) | 2,655,000 | (27,000 | ) | |||||||||
| Total other expense, net | (6,172,000 | ) | (936,000 | ) | (32,691,000 | ) | (30,743,000 | ) | ||||||||
| Loss before income taxes | (28,075,000 | ) | (7,945,000 | ) | (135,118,000 | ) | (58,893,000 | ) | ||||||||
| Income tax (benefit) provision | (565,000 | ) | 144,000 | 540,000 | 361,000 | |||||||||||
| Net loss from continuing operations | (27,510,000 | ) | (8,089,000 | ) | (135,658,000 | ) | (59,254,000 | ) | ||||||||
| Net (loss) income from discontinued operations | (929,000 | ) | 93,000 | (5,862,000 | ) | (3,614,000 | ) | |||||||||
| Net loss | (28,439,000 | ) | (7,996,000 | ) | (141,520,000 | ) | (62,868,000 | ) | ||||||||
| Net loss attributable to non-controlling interest | 6,668,000 | 725,000 | 10,420,000 | 1,061,000 | ||||||||||||
| Net loss attributable to Ault Alliance, Inc. | (21,771,000 | ) | (7,271,000 | ) | (131,100,000 | ) | (61,807,000 | ) | ||||||||
| Preferred dividends | (413,000 | ) | (190,000 | ) | (963,000 | ) | (239,000 | ) | ||||||||
| Net loss available to common stockholders | $ | (22,184,000 | ) | $ | (7,461,000 | ) | $ | (132,063,000 | ) | $ | (62,046,000 | ) | ||||
| Basic and diluted net income (loss) per common share: | ||||||||||||||||
| Continuing operations | $ | ) | $ | ) | $ | ) | $ | ) | ||||||||
| Discontinued operations | ) | ) | ) | |||||||||||||
| Net loss per common share | $ | (3.97 | ) | $ | (7.61 | ) | $ | (49.87 | ) | $ | (82.51 | ) | ||||
| Weighted average basic and diluted common shares outstanding | ||||||||||||||||
| Comprehensive loss | ||||||||||||||||
| Net loss available to common stockholders | $ | (22,184,000 | ) | $ | (7,461,000 | ) | $ | (132,063,000 | ) | $ | (62,046,000 | ) | ||||
| Foreign currency translation adjustment | (651,000 | ) | 306,000 | (1,001,000 | ) | (1,452,000 | ) | |||||||||
| Other comprehensive loss | (651,000 | ) | 306,000 | (1,001,000 | ) | (1,452,000 | ) | |||||||||
| Total comprehensive loss | $ | (22,835,000 | ) | $ | (7,155,000 | ) | $ | (133,064,000 | ) | $ | (63,498,000 | ) | ||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| F-3 |
AULT ALLIANCE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(Unaudited)
Three Months Ended September 30, 2023
| Accumulated | ||||||||||||||||||||||||||||||||||||||||
| Series A, B & D | Additional | Other | Non- | Total | ||||||||||||||||||||||||||||||||||||
| Preferred Stock | Common Stock | Paid-In | Accumulated | Comprehensive | Controlling | Treasury | Stockholders’ | |||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Deficit | Loss | Interest | Stock | Equity | |||||||||||||||||||||||||||||||
| BALANCES, July 1, 2023 | 557,237 | $ | 1,526,411 | $ | 2,000 | $ | 573,386,000 | $ | (444,371,000 | ) | $ | (1,450,000 | ) | $ | 23,853,000 | $ | (29,919,000 | ) | $ | 121,501,000 | ||||||||||||||||||||
| Stock-based compensation | - | - | 959,000 | 1,622,000 | 2,581,000 | |||||||||||||||||||||||||||||||||||
| Issuance of common stock for cash | - | 10,707,601 | 11,000 | 20,404,000 | 20,415,000 | |||||||||||||||||||||||||||||||||||
| Financing cost in connection with sales of common stock | - | - | (715,000 | ) | (715,000 | ) | ||||||||||||||||||||||||||||||||||
| Issuance of common stock for conversion of preferred stock liabilities | - | 105,909 | 584,000 | 584,000 | ||||||||||||||||||||||||||||||||||||
Common stock issued in connection with issuance of notes payable | - | 39,752 | 162,000 | 162,000 | ||||||||||||||||||||||||||||||||||||
| Remeasurement of Ault Disruptive subsidiary temporary equity | - | - | (530,000 | ) | (530,000 | ) | ||||||||||||||||||||||||||||||||||
| Increase in ownership interest of subsidiary | - | - | (352,000 | ) | (352,000 | ) | ||||||||||||||||||||||||||||||||||
| Sale of subsidiary stock to non-controlling interests | - | - | 343,000 | 343,000 | ||||||||||||||||||||||||||||||||||||
| Purchase of treasury stock - Ault Alpha LP (“Ault Alpha”) | - | - | (621,000 | ) | (621,000 | ) | ||||||||||||||||||||||||||||||||||
| Net loss | - | - | (21,771,000 | ) | (21,771,000 | ) | ||||||||||||||||||||||||||||||||||
| Preferred dividends | - | - | (413,000 | ) | (413,000 | ) | ||||||||||||||||||||||||||||||||||
| Foreign currency translation adjustments | - | - | (651,000 | ) | (651,000 | ) | ||||||||||||||||||||||||||||||||||
| Net loss attributable to non-controlling interest | - | - | (6,668,000 | ) | (6,668,000 | ) | ||||||||||||||||||||||||||||||||||
| Distribution of securities of Imperalis Holding Corp., d/b/a TurnOnGreen, Inc. (“TurnOnGreen”) to Ault Alliance stockholders ($1.44 per share) | - | - | (5,500,000 | ) | 10,700,000 | 5,200,000 | ||||||||||||||||||||||||||||||||||
| Other | - | - | (1,000 | ) | (1,000 | ) | (3,000 | ) | (1,000 | ) | (6,000 | ) | ||||||||||||||||||||||||||||
| BALANCES, September 30, 2023 | 557,237 | $ | 12,379,673 | $ | 12,000 | $ | 589,279,000 | $ | (467,088,000 | ) | $ | (2,102,000 | ) | $ | 29,498,000 | $ | (30,540,000 | ) | $ | 119,059,000 | ||||||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| F-4 |
AULT ALLIANCE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(Unaudited)
Three Months Ended September 30, 2022
| Series A, B & D | Additional | Other | Non- | Total | ||||||||||||||||||||||||||||||||||||
| Preferred Stock | Common Stock | Paid-In | Accumulated | Comprehensive | Controlling | Treasury | Stockholders’ | |||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Deficit | Loss | Interest | Stock | Equity | |||||||||||||||||||||||||||||||
| BALANCES, July 1, 2022 | 278,658 | $ | 1,081,469 | $ | 1,000 | $ | 550,036,000 | $ | (200,184,000 | ) | $ | (1,863,000 | ) | $ | 18,048,000 | $ | (20,639,000 | ) | $ | 345,399,000 | ||||||||||||||||||||
| Preferred stock issued | 8,310 | - | 207,000 | 207,000 | ||||||||||||||||||||||||||||||||||||
| Preferred stock offering costs | - | - | (65,000 | ) | (65,000 | ) | ||||||||||||||||||||||||||||||||||
| Stock-based compensation | - | - | 1,563,000 | 479,000 | 2,042,000 | |||||||||||||||||||||||||||||||||||
| Issuance of Gresham Worldwide, Inc. common stock for acquisition of Giga-tronics Incorporated (“GIGA”) | - | - | 1,669,000 | 1,669,000 | ||||||||||||||||||||||||||||||||||||
| Issuance of common stock for cash | - | 56,688 | 4,557,000 | 4,557,000 | ||||||||||||||||||||||||||||||||||||
| Financing cost in connection with sales of common stock | - | - | (79,000 | ) | (79,000 | ) | ||||||||||||||||||||||||||||||||||
| Increase in ownership interest of subsidiary | - | - | (132,000 | ) | (1,539,000 | ) | (1,671,000 | ) | ||||||||||||||||||||||||||||||||
| Non-controlling interest from GIGA acquisition | - | - | 2,735,000 | 2,735,000 | ||||||||||||||||||||||||||||||||||||
| Purchase of treasury stock - Ault Alpha | - | - | (8,148,000 | ) | (8,148,000 | ) | ||||||||||||||||||||||||||||||||||
| Net loss | - | - | (7,271,000 | ) | (7,271,000 | ) | ||||||||||||||||||||||||||||||||||
| Preferred dividends | - | - | (190,000 | ) | (190,000 | ) | ||||||||||||||||||||||||||||||||||
| Foreign currency translation adjustments | - | - | 306,000 | 306,000 | ||||||||||||||||||||||||||||||||||||
| Net loss attributable to non-controlling interest | - | - | (725,000 | ) | (725,000 | ) | ||||||||||||||||||||||||||||||||||
| Other | - | - | 2,000 | (2,000 | ) | (2,000 | ) | (1,000 | ) | (3,000 | ) | |||||||||||||||||||||||||||||
| BALANCES, September 30, 2022 | 286,968 | $ | 1,138,157 | $ | 1,000 | $ | 557,758,000 | $ | (207,647,000 | ) | $ | (1,557,000 | ) | $ | 18,996,000 | $ | (28,788,000 | ) | $ | 338,763,000 | ||||||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| F-5 |
AULT ALLIANCE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(Unaudited)
Nine Months Ended September 30, 2023
| Series A, B & D | Additional | Other | Non- | Total | ||||||||||||||||||||||||||||||||||||
| Preferred Stock | Common Stock | Paid-In | Accumulated | Comprehensive | Controlling | Treasury | Stockholders’ | |||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Deficit | Loss | Interest | Stock | Equity | |||||||||||||||||||||||||||||||
| BALANCES, January 1, 2023 | 304,878 | $ | 1,274,157 | $ | 1,000 | $ | 565,904,000 | $ | (329,078,000 | ) | $ | (1,100,000 | ) | $ | 17,496,000 | $ | (29,235,000 | ) | $ | 223,988,000 | ||||||||||||||||||||
| Issuance of common stock for restricted stock awards | - | 4,974 | ||||||||||||||||||||||||||||||||||||||
| Preferred stock issued for cash | 252,359 | - | 6,309,000 | 6,309,000 | ||||||||||||||||||||||||||||||||||||
| Preferred stock offering costs | - | - | (3,431,000 | ) | (3,431,000 | ) | ||||||||||||||||||||||||||||||||||
| Stock-based compensation | 5,642,000 | 3,546,000 | 9,188,000 | |||||||||||||||||||||||||||||||||||||
| Issuance of common stock for cash | - | 10,917,388 | 11,000 | 25,316,000 | 25,327,000 | |||||||||||||||||||||||||||||||||||
| Financing cost in connection with sales of common stock | - | - | (847,000 | ) | (847,000 | ) | ||||||||||||||||||||||||||||||||||
| Issuance of common stock for conversion of preferred stock liabilities | - | 143,402 | 912,000 | 912,000 | ||||||||||||||||||||||||||||||||||||
Common stock issued in connection with issuance of notes payable | - | 39,752 | 162,000 | 162,000 | ||||||||||||||||||||||||||||||||||||
| Remeasurement of Ault Disruptive subsidiary temporary equity | - | - | (5,945,000 | ) | (5,945,000 | ) | ||||||||||||||||||||||||||||||||||
| Increase in ownership interest of subsidiary | - | - | 13,000 | (1,597,000 | ) | (1,584,000 | ) | |||||||||||||||||||||||||||||||||
| Non-controlling position at RiskOn International, Inc. (“ROI”) subsidiary acquired | - | - | 6,357,000 | 6,357,000 | ||||||||||||||||||||||||||||||||||||
| Sale of subsidiary stock to non-controlling interests | - | - | 3,915,000 | 3,915,000 | ||||||||||||||||||||||||||||||||||||
| Distribution to Circle 8 Crane Services, LLC (“Circle 8”) non-controlling interest | - | - | (500,000 | ) | (500,000 | ) | ||||||||||||||||||||||||||||||||||
| Purchase of treasury stock - Ault Alpha | - | - | (1,306,000 | ) | (1,306,000 | ) | ||||||||||||||||||||||||||||||||||
| Net loss | - | - | (131,100,000 | ) | (131,100,000 | ) | ||||||||||||||||||||||||||||||||||
| Preferred dividends | - | (963,000 | ) | (963,000 | ) | |||||||||||||||||||||||||||||||||||
| Foreign currency translation adjustments | - | - | (1,001,000 | ) | (1,001,000 | ) | ||||||||||||||||||||||||||||||||||
| Net loss attributable to non-controlling interest | - | - | (10,420,000 | ) | (10,420,000 | ) | ||||||||||||||||||||||||||||||||||
| Distribution of securities of TurnOnGreen to Ault Alliance stockholders ($2.02 per share) | - | - | (10,700,000 | ) | 10,700,000 | |||||||||||||||||||||||||||||||||||
| Other | - | - | (1,000 | ) | (2,000 | ) | (1,000 | ) | 1,000 | 1,000 | (2,000 | ) | ||||||||||||||||||||||||||||
| BALANCES, September 30, 2023 | 557,237 | $ | 12,379,673 | $ | 12,000 | $ | 589,279,000 | $ | (467,088,000 | ) | $ | (2,102,000 | ) | $ | 29,498,000 | $ | (30,540,000 | ) | $ | 119,059,000 | ||||||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| F-6 |
AULT ALLIANCE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(Unaudited)
Nine Months Ended September 30, 2022
| Accumulated | ||||||||||||||||||||||||||||||||||||||||
| Series A, B & D | Additional | Other | Non- | Total | ||||||||||||||||||||||||||||||||||||
| Preferred Stock | Common Stock | Paid-In | Accumulated | Comprehensive | Controlling | Treasury | Stockholders’ | |||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Deficit | Loss | Interest | Stock | Equity | |||||||||||||||||||||||||||||||
| BALANCES, January 1, 2022 | 132,040 | $ | 281,149 | $ | $ | 385,728,000 | $ | (145,600,000 | ) | $ | (106,000 | ) | $ | 1,613,000 | $ | (13,180,000 | ) | $ | 228,455,000 | |||||||||||||||||||||
| Issuance of common stock for restricted stock awards | - | 1,473 | ||||||||||||||||||||||||||||||||||||||
| Preferred stock issued for cash | 154,928 | - | 3,873,000 | 3,873,000 | ||||||||||||||||||||||||||||||||||||
| Preferred stock offering costs | - | - | (602,000 | ) | (602,000 | ) | ||||||||||||||||||||||||||||||||||
| Stock-based compensation | 5,190,000 | 556,000 | 5,746,000 | |||||||||||||||||||||||||||||||||||||
| Issuance of Gresham Worldwide, Inc. common stock for acquisition of GIGA | - | - | 1,669,000 | 1,669,000 | ||||||||||||||||||||||||||||||||||||
| Issuance of common stock for cash | - | 855,535 | 1,000 | 167,982,000 | 167,983,000 | |||||||||||||||||||||||||||||||||||
| Financing cost in connection with sales of common stock | - | - | (4,103,000 | ) | (4,103,000 | ) | ||||||||||||||||||||||||||||||||||
| Increase in ownership interest of subsidiary | - | - | (1,980,000 | ) | (1,921,000 | ) | (3,901,000 | ) | ||||||||||||||||||||||||||||||||
| Non-controlling interest from AVLP acquisition | - | - | 6,738,000 | 6,738,000 | ||||||||||||||||||||||||||||||||||||
| Non-controlling interest from SMC acquisition | - | - | 10,336,000 | 10,336,000 | ||||||||||||||||||||||||||||||||||||
| Non-controlling interest from GIGA acquisition | - | - | 2,735,000 | 2,735,000 | ||||||||||||||||||||||||||||||||||||
| Purchase of treasury stock - Ault Alpha | - | - | (15,607,000 | ) | (15,607,000 | ) | ||||||||||||||||||||||||||||||||||
| Net loss | - | - | (61,807,000 | ) | (61,807,000 | ) | ||||||||||||||||||||||||||||||||||
| Preferred dividends | - | (239,000 | ) | (239,000 | ) | |||||||||||||||||||||||||||||||||||
| Foreign currency translation adjustments | - | - | (1,452,000 | ) | (1,452,000 | ) | ||||||||||||||||||||||||||||||||||
| Net loss attributable to non-controlling interest | - | - | (1,061,000 | ) | (1,061,000 | ) | ||||||||||||||||||||||||||||||||||
| Other | - | - | 1,000 | (1,000 | ) | 1,000 | (1,000 | ) | ||||||||||||||||||||||||||||||||
| BALANCES, September 30, 2022 | 286,968 | $ | 1,138,157 | $ | 1,000 | $ | 557,758,000 | $ | (207,647,000 | ) | $ | (1,557,000 | ) | $ | 18,996,000 | $ | (28,788,000 | ) | $ | 338,763,000 | ||||||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| F-7 |
AULT ALLIANCE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| For the Nine Months Ended September 30, | ||||||||
| 2023 | 2022 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | (141,520,000 | ) | $ | (62,868,000 | ) | ||
| Net loss from discontinued operations | (5,862,000 | ) | (3,614,000 | ) | ||||
| Net loss from continuing operations | (135,658,000 | ) | (59,254,000 | ) | ||||
| Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | 20,808,000 | 8,298,000 | ||||||
| Amortization of debt discount | 22,463,000 | 26,665,000 | ||||||
| Amortization of right-of-use assets | 2,142,000 | 1,193,000 | ||||||
| Impairment of goodwill and intangible assets | 35,570,000 | |||||||
| Impairment of property and equipment | 3,895,000 | |||||||
| Stock-based compensation | 9,188,000 | 5,746,000 | ||||||
| Impairment of deposit due to vendor bankruptcy filing | 2,000,000 | |||||||
| Gain on the sale of fixed assets | (2,728,000 | ) | ||||||
| Impairment of equity securities | 11,555,000 | |||||||
| Impairment of cryptocurrencies | 376,000 | 2,930,000 | ||||||
| Realized gain on the sale of cryptocurrencies | (404,000 | ) | (829,000 | ) | ||||
| Revenue, cryptocurrency mining | (23,273,000 | ) | (11,398,000 | ) | ||||
| Realized losses on sale of marketable securities | (33,140,000 | ) | (19,194,000 | ) | ||||
| Unrealized (gains) losses on marketable securities | (2,554,000 | ) | 16,937,000 | |||||
| Unrealized losses on investments in common stock, related parties | 3,752,000 | 5,676,000 | ||||||
| Unrealized gains on equity securities | (32,949,000 | ) | ||||||
| Income from cash held in trust | (2,561,000 | ) | ||||||
| Loss from investment in unconsolidated entity | 924,000 | |||||||
| Loss on remeasurement of investment in unconsolidated entity | 2,700,000 | |||||||
| Provision for loan losses | 1,180,000 | |||||||
| Change in the fair value of warrant liability | (2,655,000 | ) | (917,000 | ) | ||||
| Other | 1,550,000 | (766,000 | ) | |||||
| Changes in operating assets and liabilities: | ||||||||
| Proceeds from the sale of cryptocurrencies | 21,330,000 | 8,952,000 | ||||||
| Marketable equity securities | 71,159,000 | 68,532,000 | ||||||
| Accounts receivable | (5,582,000 | ) | (3,022,000 | ) | ||||
| Inventories | (456,000 | ) | (5,867,000 | ) | ||||
| Prepaid expenses and other current assets | (1,530,000 | ) | 1,599,000 | |||||
| Other assets | (3,969,000 | ) | (2,944,000 | ) | ||||
| Accounts payable and accrued expenses | 13,527,000 | 7,528,000 | ||||||
| Lease liabilities | (2,511,000 | ) | (1,334,000 | ) | ||||
| Net cash provided by operating activities from continuing operations | 1,474,000 | 21,206,000 | ||||||
| Net cash (used in) provided by operating activities from discontinued operations | (3,632,000 | ) | 683,000 | |||||
| Net cash (used in) provided by operating activities | (2,158,000 | ) | 21,889,000 | |||||
| Cash flows from investing activities: | ||||||||
| Purchase of property and equipment | (8,734,000 | ) | (80,058,000 | ) | ||||
| Investment in promissory notes and other, related parties | (2,200,000 | ) | ||||||
| Investments in common stock and warrants, related parties | (4,840,000 | ) | ||||||
| Purchase of SMC, net of cash received | (8,239,000 | ) | ||||||
| Purchase of GIGA, net of cash received | (3,687,000 | ) | ||||||
| Cash received upon acquisition of AVLP | 1,245,000 | |||||||
| Acquisition of non-controlling interests | (1,584,000 | ) | (3,901,000 | ) | ||||
| Purchase of marketable equity securities | (1,981,000 | ) | ||||||
| Sales of marketable equity securities | 11,748,000 | |||||||
| Investments in loans receivable | (182,000 | ) | (7,081,000 | ) | ||||
| Principal payments on loans receivable | 10,525,000 | |||||||
| Investments in equity securities | (10,702,000 | ) | (22,449,000 | ) | ||||
| Proceeds from the sale of fixed assets | 4,515,000 | |||||||
| Other | (79,000 | ) | ||||||
| Net cash used in investing activities from continuing operations | (16,766,000 | ) | (110,918,000 | ) | ||||
| Net cash used in investing activities from discontinued operations | (6,103,000 | ) | (4,442,000 | ) | ||||
| Net cash used in investing activities | (22,869,000 | ) | (115,360,000 | ) | ||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| F-8 |
AULT ALLIANCE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
(Unaudited)
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| F-9 |
1. DESCRIPTION OF BUSINESS
Ault Alliance, Inc., a Delaware corporation (“Ault Alliance” or the “Company”) is a diversified holding company pursuing growth by acquiring undervalued businesses and disruptive technologies with a global impact. Through its wholly- and majority-owned subsidiaries and strategic investments, the Company owns and operates a data center at which it mines Bitcoin and offers colocation and hosting services for the emerging artificial intelligence ecosystems and other industries, and provides mission-critical products that support a diverse range of industries, including metaverse platform, oil exploration, crane services, defense/aerospace, industrial, automotive, medical/biopharma, consumer electronics, hotel operations and textiles. In addition, the Company extends credit to select entrepreneurial businesses through a licensed lending subsidiary.
Ault Alliance was founded by Milton “Todd” Ault, III, its Executive Chairman and is led by Milton “Todd” Ault, III, William B. Horne, its Chief Executive Officer and Vice Chairman and Henry Nisser, its President and General Counsel. Together, they constitute the Executive Committee, which manages the day-to-day operations of the Company. All major investment and capital allocation decisions are made for the Company by the Executive Committee. The Company has the following eight reportable segments:
| · | Energy and Infrastructure (“Energy”) – crane operations, advanced textiles processing and oil exploration; |
| · | Technology and Finance (“Fintech”) – commercial lending, activist investing, stock trading, media, and digital learning; |
| · | The Singing Machine Company, Inc. (“SMC”) – consumer electronics; |
| · | Sentinum, Inc. (“Sentinum”) – cryptocurrency mining operations and colocation and hosting services for the emerging artificial intelligence ecosystems and other industries; |
| · | GIGA – defense industry; |
| · | TurnOnGreen – commercial electronics solutions; |
| · | RiskOn International, Inc., formerly BitNile Metaverse, Inc. (“ROI”) – immersive metaverse platform; and |
| · | Ault Disruptive – a special purpose acquisition company. |
Reverse Stock Split
On May 15, 2023, pursuant to the authorization provided by the Company’s stockholders at a special meeting of stockholders, the Company’s board of directors approved an amendment to the Certificate of Incorporation to effectuate a reverse stock split of the Company’s issued and outstanding common stock by a ratio of one-for-three hundred (the “Reverse Split”). The Reverse Split did not affect the number of authorized shares of common stock, preferred stock or their respective par value per share. As a result of the Reverse Split, each three hundred shares of common stock issued and outstanding prior to the Reverse Split were converted into one share of common stock. The Reverse Split became effective in the State of Delaware on May 17, 2023. All share amounts in these financial statements have been updated to reflect the Reverse Split.
2. LIQUIDITY AND FINANCIAL CONDITION
As of September 30, 2023, the Company had cash and cash equivalents of $8.7 million, negative working capital of $45.1 million and a history of net operating losses. The Company has financed its operations principally through issuances of convertible debt, promissory notes and equity securities. These factors create substantial doubt about the Company’s ability to continue as a going concern for at least one year after the date that these condensed consolidated financial statements are issued.
The condensed consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. Accordingly, the condensed consolidated financial statements have been prepared on a basis that assumes the Company will continue as a going concern and which contemplates the realization of assets and satisfaction of liabilities and commitments in the ordinary course of business.
In making this assessment management performed a comprehensive analysis of the Company’s current circumstances, including its financial position, cash flow and cash usage forecasts, as well as obligations and debts. Although management has a long history of successful capital raises, the analysis used to determine the Company’s ability as a going concern does not include cash sources beyond the Company’s direct control that management expects to be available within the next 12 months.
| F-10 |
Management expects that the Company’s existing cash and cash equivalents, accounts receivable and marketable securities as of September 30, 2023, will not be sufficient to enable the Company to fund its anticipated level of operations through one year from the date these financial statements are issued. Management anticipates raising additional capital through the private and public sales of the Company’s equity or debt securities and selling its marketable securities and digital currencies, or a combination thereof. Although management believes that such capital sources will be available, there can be no assurances that financing will be available to the Company when needed in order to allow the Company to continue its operations, or if available, on terms acceptable to the Company. If the Company does not raise sufficient capital in a timely manner, among other things, the Company may be forced to scale back its operations or cease operations altogether.
3. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and Regulation S-X and do not include all the information and disclosures required by generally accepted accounting principles in the United States of America (“GAAP”). The Company has made estimates and judgments affecting the amounts reported in the Company’s condensed consolidated financial statements and the accompanying notes. The actual results experienced by the Company may differ materially from the Company’s estimates. The condensed consolidated financial information is unaudited but reflects all normal adjustments that are, in the opinion of management, necessary to provide a fair statement of results for the interim periods presented.
These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements in the Company’s amended Annual Report on Form 10-K/A for the year ended December 31, 2022 (the “2022 Annual Report”), filed with the Securities and Exchange Commission (the “SEC”) on May 22, 2023. The condensed consolidated balance sheet as of December 31, 2022 was derived from the Company’s audited 2022 financial statements contained in the above referenced 2022 Annual Report. Results of the three and nine months ended September 30, 2023, are not necessarily indicative of the results to be expected for the full year ending December 31, 2023.
Significant Accounting Policies
Other than as noted below, there have been no material changes to the Company’s significant accounting policies previously disclosed in the 2022 Annual Report.
Revenue Recognition – Bitcoin Mining
The Company recognizes revenue from Bitcoin mining under Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers (“ASC 606”). The core principle of ASC 606 is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The following five steps are applied to achieve that core principle:
| · | Step 1: Identify the contract with the customer; |
| · | Step 2: Identify the performance obligations in the contract; |
| · | Step 3: Determine the transaction price; |
| · | Step 4: Allocate the transaction price to the performance obligations in the contract; and |
| · | Step 5: Recognize revenue when the company satisfies a performance obligation. |
The Company has entered into a digital asset mining pool by executing a contract with a mining pool operator to provide computing power to the mining pool. The Company’s customer, as defined in ASC 606-10-20, is the mining pool operator with which the Company has agreed to the terms of service and user service agreement. The Company supplies computing power, in exchange for consideration, to the pool operator who in turn provides transaction verification services to third parties via a mining pool that includes other participants.
The Company’s enforceable right to compensation begins only when, and lasts as long as, the Company provides computing power to the mining pool operator and is created as power is provided over time. The only consideration due to the Company relates to the provision of computing power. The contracts are terminable at any time by and at no cost to the Company, and by the pool operator. Providing computing power in digital asset transaction verification services is an output of the Company’s ordinary activities. Providing such computing power is the only performance obligation in the Company’s contracts with mining pool operators.
| F-11 |
The transaction consideration the Company receives, if any, is non-cash consideration in the form of Bitcoin. Changes in the fair value of the non-cash consideration due to form of the consideration (changes in the market price of Bitcoin) are not included in the transaction price and are therefore not included in revenue. The mining pool operator charges fees to cover the costs of maintaining the pool and are deducted from amounts the Company may otherwise earn and are treated as a reduction to the consideration received. Fees fluctuate and historically have been approximately 0.3% per reward earned, on average.
In exchange for providing computing power, the Company is entitled to a Full-Pay-Per-Share payout of Bitcoin based on a contractual formula, which primarily calculates the hash rate provided by the Company to the mining pool as a percentage of total network hash rate, and other inputs. The Company is entitled to consideration even if a block is not successfully placed by the mining pool operator. The contract is in effect until terminated by either party.
All consideration pursuant to this arrangement is variable. It is not probable that a significant reversal of cumulative revenue will occur and the Company is able to calculate the payout based on the contractual formula, non-cash revenue is estimated and recognized based on the spot price of the Company’s principal market for Bitcoin at the inception of each contract, which is determined to be daily. Non-cash consideration is measured at fair value at contract inception. Fair value of the crypto asset consideration is determined using the spot price of the Company’s principal market for Bitcoin at the beginning of the contract period. This amount is estimated and recognized in revenue upon inception, which is when hash rate is provided.
There is no significant financing component in these transactions.
Expenses associated with running the cryptocurrency mining business, such as equipment depreciation and electricity costs, are recorded as a component of cost of revenues.
Preferred Stock Liabilities
The Company follows ASC 480-10, “Distinguishing Liabilities from Equity” in its evaluation of the accounting for the Preferred Shares (as defined in Note 17). ASC 480-10-25-14 requires liability accounting for certain financial instruments, including shares that embody an unconditional obligation to transfer a variable number of shares, provided that the monetary value of the obligation is based solely or predominantly on one of the following three characteristics:
| · | A fixed monetary amount known at inception; |
| · | Variations in something other than the fair value of the issuer’s shares; or |
| · | Variations in the fair value of the issuer’s equity shares, but the monetary value to the counterparty moves in the opposite direction as the value of the issuer’s shares. |
The number of shares delivered is determined on the basis of (1) the fixed monetary amount determined as the stated value and (2) the current stock price at settlement, so that the aggregate fair value of the shares delivered equals the monetary value of the obligation, which is fixed or predominantly fixed. Accordingly, the holder is not significantly exposed to gains and losses attributable to changes in the fair value of the Company’s equity shares. Instead, the Company is using its own equity shares as currency to settle a monetary obligation.
Discontinued operations
The Company records discontinued operations when the disposal of a separately identified business unit constitutes a strategic shift in the Company’s operations, as defined in ASC Topic 205-20, Discontinued Operations (“ASC Topic 205-20”).
Reclassifications
Certain prior period amounts have been reclassified for comparative purposes to conform to the current-period financial statement presentation. These reclassifications had no effect on previously reported results of operations.
Recently Adopted Accounting Standards
In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-13, “Financial Instruments - Credit Losses,” (“ASU No. 2016-13”) to improve information on credit losses for financial assets and net investment in leases that are not accounted for at fair value through net income. ASU 2016-13 replaces the current incurred loss impairment methodology with a methodology that reflects expected credit losses. This guidance was effective for the Company beginning on January 1, 2023. The adoption of this guidance did not have a material impact on the Company’s condensed consolidated financial statements.
| F-12 |
In October 2021, the FASB issued ASU 2021-08, “Business Combinations (Topic 805), Accounting for Contract Assets and Contract Liabilities from Contracts with Customers,” which requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606, “Revenue from Contracts with Customers.” The guidance will result in the acquirer recognizing contract assets and contract liabilities at the same amounts recorded by the acquiree. The guidance should be applied prospectively to acquisitions occurring on or after the effective date. The guidance is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The adoption of this guidance did not have a material impact on the Company’s condensed consolidated financial statements.
4. ASSETS HELD FOR SALE AND DISCONTINUED OPERATIONS
Presentation of AGREE Operations
In September 2023, the Company committed to a plan for its wholly owned subsidiary AGREE to list for sale its four recently renovated Midwest hotels, the Hilton Garden Inn in Madison West, the Residence Inn in Madison West, the Courtyard in Madison West, and the Hilton Garden Inn in Rockford. The decision to sell the hotels follows the decision to also list the multifamily development site in St. Petersburg, Florida and is driven by the Company’s desire to focus on its core businesses, Energy, Fintech and Sentinum. The Company’s real estate properties, which include both hotels and land are currently listed for sale.
In connection with the planned sale of AGREE assets, the Company concluded that the net assets of AGREE met the criteria for classification as held for sale. In addition, the proposed sale represents a strategic shift that will have a significant effect on the Company’s operations and financial results. As a result, the Company has presented the results of operations, cash flows and financial position of AGREE as discontinued operations in the accompanying consolidated financial statements and notes for all periods presented.
As of September 30, 2023, the Company expects the planned sale of AGREE assets to close within one year and, as a result, the Company has classified the total assets and total liabilities associated with AGREE as current in the consolidated balance sheets as of September 30, 2023.
The following table presents the assets and liabilities of AGREE operations:
| September 30, | December 31, | |||||||
| 2023 | 2022 | |||||||
| Cash and cash equivalents | $ | 1,851,000 | $ | 2,550,000 | ||||
| Restricted cash | 2,831,000 | |||||||
| Accounts receivable | 256,000 | 264,000 | ||||||
| Inventories | 51,000 | 44,000 | ||||||
| Prepaid expenses and other current assets | 262,000 | 270,000 | ||||||
| Total current assets | 2,420,000 | 5,959,000 | ||||||
| Property and equipment, net | 96,176,000 | 92,535,000 | ||||||
| Total assets | 98,596,000 | 98,494,000 | ||||||
| Accounts payable and accrued expenses | 2,097,000 | 2,631,000 | ||||||
| Total current liabilities | 2,097,000 | 2,631,000 | ||||||
| Notes payable | 67,115,000 | 61,633,000 | ||||||
| Total liabilities | 69,212,000 | 64,264,000 | ||||||
| Net assets of discontinued operations | $ | 29,384,000 | $ | 34,230,000 | ||||
A disposal group classified as held for sale shall be measured at the lower of its carrying amount or fair value less costs to sell. No impairment was recognized up reclassification of the disposal group as held for sale.
| F-13 |
The following table presents the results of AGREE operations:
| For the Three Months Ended | For the Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| Revenue, hotel and real estate operations | $ | 5,404,000 | $ | 5,513,000 | $ | 12,031,000 | $ | 12,809,000 | ||||||||
| Cost of revenue, hotel operations | 3,278,000 | 3,230,000 | 9,086,000 | 8,350,000 | ||||||||||||
| Gross profit | 2,126,000 | 2,283,000 | 2,945,000 | 4,459,000 | ||||||||||||
| General and administrative | 1,076,000 | 585,000 | 3,294,000 | 4,309,000 | ||||||||||||
| Total operating expenses | 1,076,000 | 585,000 | 3,294,000 | 4,309,000 | ||||||||||||
| Income (loss) from operations | 1,050,000 | 1,698,000 | (349,000 | ) | 150,000 | |||||||||||
| Interest expense | (1,979,000 | ) | (1,605,000 | ) | (5,513,000 | ) | (3,764,000 | ) | ||||||||
| Net (loss) income from discontinued operations | $ | (929,000 | ) | $ | 93,000 | $ | (5,862,000 | ) | $ | (3,614,000 | ) | |||||
5. REVENUE DISAGGREGATION
The following tables summarize disaggregated customer contract revenues and the source of the revenue for the three and nine months ended September 30, 2023 and 2022. Revenues from lending and trading activities included in consolidated revenues were primarily interest, dividend and other investment income, which are not considered to be revenues from contracts with customers under GAAP.
The Company’s disaggregated revenues consisted of the following for the three months ended September 30, 2023 (excludes Ault Disruptive, as that segment has no revenue):
| GIGA | TurnOn Green | Fintech | Sentinum | SMC | ROI | Energy | Total | |||||||||||||||||||||||||
| Primary Geographical Markets | ||||||||||||||||||||||||||||||||
| North America | $ | 3,711,000 | $ | 1,075,000 | $ | $ | 7,891,000 | $ | 15,931,000 | $ | 18,000 | $ | 12,929,000 | $ | 41,555,000 | |||||||||||||||||
| Europe | 2,521,000 | 66,000 | 2,000 | 2,589,000 | ||||||||||||||||||||||||||||
| Middle East and other | 4,043,000 | 25,000 | 4,068,000 | |||||||||||||||||||||||||||||
| Revenue from contracts with customers | 10,275,000 | 1,166,000 | 7,891,000 | 15,931,000 | 18,000 | 12,931,000 | 48,212,000 | |||||||||||||||||||||||||
| Revenue, lending and trading activities (North America) | (249,000 | ) | (249,000 | ) | ||||||||||||||||||||||||||||
| Total revenue | $ | 10,275,000 | $ | 1,166,000 | $ | (249,000 | ) | $ | 7,891,000 | $ | 15,931,000 | $ | 18,000 | $ | 12,931,000 | $ | 47,963,000 | |||||||||||||||
| Major Goods or Services | ||||||||||||||||||||||||||||||||
| Radio frequency/microwave filters | $ | 2,201,000 | $ | $ | $ | $ | $ | $ | $ | 2,201,000 | ||||||||||||||||||||||
| Power supply units & systems | 2,316,000 | 1,074,000 | 3,390,000 | |||||||||||||||||||||||||||||
| Healthcare diagnostic systems | 1,243,000 | 1,243,000 | ||||||||||||||||||||||||||||||
| Defense systems | 4,155,000 | 4,155,000 | ||||||||||||||||||||||||||||||
| Digital currency mining | 7,558,000 | 7,558,000 | ||||||||||||||||||||||||||||||
| Karaoke machines and related consumer goods | 15,931,000 | 15,931,000 | ||||||||||||||||||||||||||||||
| Crane rental | 12,490,000 | 12,490,000 | ||||||||||||||||||||||||||||||
| Other | 360,000 | 92,000 | 333,000 | 18,000 | 441,000 | 1,244,000 | ||||||||||||||||||||||||||
| Revenue from contracts with customers | 10,275,000 | 1,166,000 | 7,891,000 | 15,931,000 | 18,000 | 12,931,000 | 48,212,000 | |||||||||||||||||||||||||
| Revenue, lending and trading activities | (249,000 | ) | (249,000 | ) | ||||||||||||||||||||||||||||
| Total revenue | $ | 10,275,000 | $ | 1,166,000 | $ | (249,000 | ) | $ | 7,891,000 | $ | 15,931,000 | $ | 18,000 | $ | 12,931,000 | $ | 47,963,000 | |||||||||||||||
| Timing of Revenue Recognition | ||||||||||||||||||||||||||||||||
| Goods transferred at a point in time | $ | 5,391,000 | $ | 1,162,000 | $ | $ | 7,891,000 | $ | 15,931,000 | $ | 18,000 | $ | 441,000 | $ | 30,834,000 | |||||||||||||||||
| Services transferred over time | 4,884,000 | 4,000 | 12,490,000 | 17,378,000 | ||||||||||||||||||||||||||||
| Revenue from contracts with customers | $ | 10,275,000 | $ | 1,166,000 | $ | $ | 7,891,000 | $ | 15,931,000 | $ | 18,000 | $ | 12,931,000 | $ | 48,212,000 | |||||||||||||||||
| F-14 |
The Company’s disaggregated revenues consisted of the following for the nine months ended September 30, 2023 (excludes Ault Disruptive, as that segment has no revenue):
| GIGA | TurnOn Green | Fintech | Sentinum | SMC | ROI | Energy | Total | |||||||||||||||||||||||||
| Primary Geographical Markets | ||||||||||||||||||||||||||||||||
| North America | $ | 8,901,000 | $ | 2,401,000 | $ | $ | 24,389,000 | $ | 21,939,000 | $ | 63,000 | $ | 38,604,000 | $ | 96,297,000 | |||||||||||||||||
| Europe | 7,232,000 | 77,000 | 109,000 | 7,418,000 | ||||||||||||||||||||||||||||
| Middle East and other | 11,590,000 | 288,000 | 11,878,000 | |||||||||||||||||||||||||||||
| Revenue from contracts with customers | 27,723,000 | 2,766,000 | 24,389,000 | 21,939,000 | 63,000 | 38,713,000 | 115,593,000 | |||||||||||||||||||||||||
| Revenue, lending and trading activities (North America) | 4,337,000 | 4,337,000 | ||||||||||||||||||||||||||||||
| Total revenue | $ | 27,723,000 | $ | 2,766,000 | $ | 4,337,000 | $ | 24,389,000 | $ | 21,939,000 | $ | 63,000 | $ | 38,713,000 | $ | 119,930,000 | ||||||||||||||||
| Major Goods or Services | ||||||||||||||||||||||||||||||||
| Radio frequency/microwave filters | $ | 5,420,000 | $ | $ | $ | $ | $ | $ | $ | 5,420,000 | ||||||||||||||||||||||
| Power supply units & systems | 6,994,000 | 2,544,000 | 9,538,000 | |||||||||||||||||||||||||||||
| Healthcare diagnostic systems | 3,481,000 | 3,481,000 | ||||||||||||||||||||||||||||||
| Defense systems | 10,719,000 | 10,719,000 | ||||||||||||||||||||||||||||||
| Digital currency mining | 23,273,000 | 23,273,000 | ||||||||||||||||||||||||||||||
| Karaoke machines and related consumer goods | 21,939,000 | 21,939,000 | ||||||||||||||||||||||||||||||
| Crane rental | 37,726,000 | 37,726,000 | ||||||||||||||||||||||||||||||
| Other | 1,109,000 | 222,000 | 1,116,000 | 63,000 | 987,000 | 3,497,000 | ||||||||||||||||||||||||||
| Revenue from contracts with customers | 27,723,000 | 2,766,000 | 24,389,000 | 21,939,000 | 63,000 | 38,713,000 | 115,593,000 | |||||||||||||||||||||||||
| Revenue, lending and trading activities | 4,337,000 | 4,337,000 | ||||||||||||||||||||||||||||||
| Total revenue | $ | 27,723,000 | $ | 2,766,000 | $ | 4,337,000 | $ | 24,389,000 | $ | 21,939,000 | $ | 63,000 | $ | 38,713,000 | $ | 119,930,000 | ||||||||||||||||
| Timing of Revenue Recognition | ||||||||||||||||||||||||||||||||
| Goods transferred at a point in time | $ | 15,517,000 | $ | 2,755,000 | $ | $ | 24,389,000 | $ | 21,939,000 | $ | 63,000 | $ | 987,000 | $ | 65,650,000 | |||||||||||||||||
| Services transferred over time | 12,206,000 | 11,000 | 37,726,000 | 49,943,000 | ||||||||||||||||||||||||||||
| Revenue from contracts with customers | $ | 27,723,000 | $ | 2,766,000 | $ | $ | 24,389,000 | $ | 21,939,000 | $ | 63,000 | $ | 38,713,000 | $ | 115,593,000 | |||||||||||||||||
The Company’s disaggregated revenues consisted of the following for the three months ended September 30, 2022 (excludes Ault Disruptive, as that segment has no revenue):
| GIGA | TurnOn Green | Fintech | SMC | Sentinum | Total | |||||||||||||||||||
| Primary Geographical Markets | ||||||||||||||||||||||||
| North America | $ | 2,472,000 | $ | 1,428,000 | $ | $ | 16,138,000 | $ | 4,146,000 | $ | 24,184,000 | |||||||||||||
| Europe | 2,288,000 | 32,000 | 201,000 | 306,000 | 2,827,000 | |||||||||||||||||||
| Middle East and other | 3,022,000 | 202,000 | 670,000 | 3,894,000 | ||||||||||||||||||||
| Revenue from contracts with customers | 7,782,000 | 1,662,000 | 201,000 | 17,114,000 | 4,146,000 | 30,905,000 | ||||||||||||||||||
| Revenue, lending and trading activities (North America) | 13,360,000 | 13,360,000 | ||||||||||||||||||||||
| Total revenue | $ | 7,782,000 | $ | 1,662,000 | $ | 13,561,000 | $ | 17,114,000 | $ | 4,146,000 | $ | 44,265,000 | ||||||||||||
| Major Goods or Services | ||||||||||||||||||||||||
| Power supply units | $ | 2,799,000 | $ | 1,480,000 | $ | $ | $ | $ | 4,279,000 | |||||||||||||||
| Digital currency mining, net | 3,874,000 | 3,874,000 | ||||||||||||||||||||||
| Karaoke machines and related | ||||||||||||||||||||||||