Financing Activities - Hyperscale Data issued a convertible promissory note of $1.9 million on February 5, 2025, with a 15% annual interest rate, convertible at $4.00 per share [122]. - An amended and restated convertible promissory note of $3.5 million was issued on February 2025, accruing interest at 18% per annum, convertible at $2.00 per share [123]. - On March 14, 2025, a convertible promissory note of $4.2 million was issued, accruing interest at 15% per annum, with a conversion price based on the greater of $0.40 or 75% of the VWAP [124]. - The company entered into a securities purchase agreement on March 31, 2025, to sell up to 50,000 shares of Series B Convertible Preferred Stock for a total of $50.0 million [127]. - Each share of Series B Preferred Stock has a stated value of $1,000.00 and is convertible at a maximum price of $10.00 per share, with a cumulative cash dividend of 15% per annum [128]. - The company issued a total of 52,700 shares of Series D preferred stock for the settlement of equity line of credit advances totaling $0.6 million from April 1, 2025, through May 15, 2025 [172]. - A convertible promissory note with a principal face amount of $1.7 million was issued on April 1, 2025, accruing interest at 15% per annum, maturing on September 30, 2025 [173]. - The company entered into securities purchase agreements on April 15, 2025, issuing convertible promissory notes with an aggregate principal face amount of $5.0 million for gross consideration of $4.0 million [175]. - The Notes issued on April 15, 2025, have an original issue discount of 20%, or $1.0 million, and will mature on September 30, 2025 [176]. - The company made payments of $1.9 million in preferred dividends and $0.3 million on convertible notes payable [178]. Financial Performance - Total revenue for the three months ended March 31, 2025, was $25.02 million, a decrease of 35% from $38.37 million in the same period of 2024 [144]. - Revenue from crypto assets mining decreased by $6.25 million, or 55%, to $5.20 million due to a decline in mined crypto assets and increased mining difficulty [144][145]. - Crane operations revenue increased by $0.85 million, or 7%, to $13.77 million, driven by improved utilization of the crane fleet [146]. - Revenues from lending and trading activities dropped to approximately $0, a decrease of $9.13 million, primarily due to the transfer of shares affecting prior year revenue [147]. - Gross margins declined to 21% for the three months ended March 31, 2025, compared to 47% for the same period in 2024, largely due to poor performance in lending and trading activities [152]. - Selling and marketing expenses decreased by $1.7 million, or 42%, to $2.33 million, attributed to lower advertising and promotion costs [154]. - General and administrative expenses decreased by $1.2 million, or 11%, to $9.20 million, mainly due to lower professional fees and salaries [155]. - Other expense, net was $4.0 million for the three months ended March 31, 2025, down from $10.5 million in the same period of 2024 [156]. Cash Flow - As of March 31, 2025, cash and cash equivalents were $4.2 million, a slight decrease from $4.5 million as of December 31, 2024 [165]. - Net cash used in operating activities totaled $4.0 million for the three months ended March 31, 2025, compared to $10.2 million for the same period in 2024 [166]. - Net cash used in investing activities was $1.2 million for the three months ended March 31, 2025, a decrease from $1.7 million for the same period in 2024 [167]. - Net cash provided by financing activities was $4.7 million for the three months ended March 31, 2025, down from $13.0 million in the same period of 2024 [168]. Impairments and Gains - Hyperscale Data recognized a gain of $2.0 million from the deconsolidation of GIGA, which filed for Chapter 11 bankruptcy on August 14, 2024 [133]. - A gain of $10.0 million was recognized from the deconsolidation of AVLP, which filed for liquidation under Chapter 7 on March 28, 2025 [137]. - The company recorded an impairment loss of $8.0 million related to AGREE hotel properties during the year ended December 31, 2024 [136]. Strategic Initiatives - Hyperscale Data aims to maximize stockholder value through various initiatives, including public offerings and sales of subsidiaries [138]. - The company has provided capital and expertise to support growth in sectors such as AI software, social gaming, and hotel operations [140]. Accounting and Risk Disclosures - There have been no material changes to critical accounting estimates previously disclosed in the 2024 Annual Report [179]. - Market risk disclosures are not applicable for a smaller reporting company [180].
Ault Alliance(AULT) - 2025 Q1 - Quarterly Report