Revenue and Profitability - Total revenue for the three months ended September 30, 2020, was $5,675,564, an increase of $330,735 or 6.2% from $5,344,829 in the same period of 2019[260] - Gross profit for the three months ended September 30, 2020, was $1,939,482, compared to $996,068 for the same period in 2019[259] - Gross margins increased to 34.2% for the three months ended September 30, 2020, up from 18.6% in the same period of 2019[262] - Revenues increased by $584,670, or 3.6%, to $16,681,978 for the nine months ended September 30, 2020, from $16,097,308 for the same period in 2019[278] - Gross margins increased to 33.6% for the nine months ended September 30, 2020, compared to 16.5% for the same period in 2019[280] Losses and Expenses - Loss from continuing operations for the three months ended September 30, 2020, was $(16,734,356), compared to $(10,056,704) in the same period of 2019[259] - The company recorded a loss from continuing operations of $1,624,708 for the three months ended September 30, 2020, a significant improvement from an operating loss of $7,685,889 for the same period in 2019[266] - The company reported a net loss attributable to common stockholders of $24,651,764 for the nine months ended September 30, 2020, compared to a net loss of $21,090,795 for the same period in 2019[277] - Net loss for the nine months ended September 30, 2020, was $24,641,437, an increase from a net loss of $21,110,774 for the same period in 2019, with non-cash charges totaling $18,099,816[292] Cash Flow and Financing - Cash and cash equivalents increased to $1,274,408 as of September 30, 2020, compared to $483,383 at December 31, 2019, primarily due to financing activities[295] - Net cash used in continuing operating activities decreased to $5,355,228 for the nine months ended September 30, 2020, from $8,320,953 for the same period in 2019, reflecting improved operating results[297] - Net cash used in investing activities was $893,978 for the nine months ended September 30, 2020, down from $2,674,446 for the same period in 2019, attributed to decreased related party investments[298] - Net cash provided by financing activities was $7,054,414 for the nine months ended September 30, 2020, compared to $11,083,232 for the same period in 2019, primarily from notes payable and short-term advances[298] - The company expects to continue incurring losses and will need to raise additional capital to support working capital requirements, with potential measures to reduce costs if unable to secure funding[301] Operational Changes - The company ceased operations at Digital Farms due to deteriorating business conditions in the cryptocurrency mining sector, resulting in no revenue from cryptocurrency operations during the three months ended September 30, 2020[261] - Engineering and product development expenses decreased to $468,838 for the three months ended September 30, 2020, from $481,902 in the same period of 2019[263] - Selling and marketing expenses decreased by $71,458, or 21.6%, to $259,649 for the three months ended September 30, 2020, compared to $331,107 for the same period in 2019[264] - General and administrative expenses decreased by $718,103, or 20.2%, to $2,835,940 for the three months ended September 30, 2020, compared to $3,554,043 for the same period in 2019[265] - General and administrative expenses decreased by $2,910,339, or 25.2%, to $8,656,841 for the nine months ended September 30, 2020, compared to $11,567,180 for the same period in 2019[283] Interest Income and Expense - Interest income for the three months ended September 30, 2020, was $102,397, down from $898,646 in the same period of 2019[259] - Interest income decreased by $796,249, or 88.6%, to $102,397 for the three months ended September 30, 2020, compared to $898,646 for the same period in 2019[267] - Interest expense decreased to $(2,365,741) for the three months ended September 30, 2020, compared to $(2,954,843) in the same period of 2019[259] - Interest expense decreased by $589,102, or 19.9%, to $2,365,741 for the three months ended September 30, 2020, compared to $2,954,843 for the same period in 2019[268] - Interest expense decreased to $4,414,618 for the nine months ended September 30, 2020, down from $5,585,850 for the same period in 2019, primarily due to reduced amortization of debt discount[286] Other Comprehensive Income - Other comprehensive income was $1,072,181 for the nine months ended September 30, 2020, compared to a loss of $1,253,990 for the same period in 2019, mainly due to unrealized gains in warrant derivative securities[294] Capital Raising - The company has raised capital through various means, including a Master Exchange Agreement with Esousa, which involved approximately $4.2 million in principal amount of promissory notes[299] - The company anticipates returning value to shareholders after satisfying debt obligations and working capital needs[254] - The company is focused on managing and financially supporting existing subsidiaries to maximize shareholder value through various monetization opportunities[254]
Ault Alliance(AULT) - 2020 Q3 - Quarterly Report