Business Operations - Hyperscale Data operates a large-scale data center platform integrating AI compute infrastructure with Bitcoin mining operations [159]. - The company expects to divest Ault Capital Group, Inc. in Q2 2026, focusing on AI data center and Bitcoin infrastructure [160]. - Sentinum plans to deploy approximately 6,800 S19j miners at a service provider's data center, with an initial setup fee of $10 per miner [174][175]. - The company anticipates receiving 70% of Bitcoin rewards after initial fees are paid, with the service provider receiving 30% [175]. Financial Instruments - A convertible promissory note of $1.9 million was issued on February 5, 2025, with a conversion price of $4.00 per share [161]. - An amended and restated convertible promissory note of $3.5 million was issued, convertible at $2.00 per share, maturing on May 15, 2025 [162]. - A securities purchase agreement was entered to sell up to 50,000 shares of Series B Convertible Preferred Stock for up to $50.0 million [166]. - Each share of Series B Preferred Stock has a stated value of $1,000.00 and offers a cumulative cash dividend of 15% annually [167]. - A securities purchase agreement was made to sell up to 100,000 shares of Series H convertible preferred stock for a total of up to $100.0 million [176]. - The company raised $125 million through the sale of 255.4 million shares of Class A common stock via an ATM offering between August 29, 2025, and November 4, 2025 [178]. - Ault Lending entered into a loan agreement with GIGA for up to $10.0 million, with the first tranche of $6.5 million funded on September 30, 2025 [179]. Revenue and Performance - For the three months ended September 30, 2025, total revenue decreased by 22% to $24.3 million from $31.1 million in the same period of 2024 [197]. - Revenue from crane operations declined by $2.6 million, or 21%, due to reduced demand from oil and gas customers [199]. - Revenue from crypto assets mining increased by $0.4 million, or 8%, driven by a 30% increase in self-mined Bitcoin revenue [198]. - AGREE's hotel operations revenues increased by $0.4 million, or 7%, for the three months ended September 30, 2025, compared to the same period in 2024 [200]. - Revenues from lending and trading activities decreased by $5.4 million to approximately $0.1 million for the three months ended September 30, 2025, compared to $5.6 million in the same period in 2024, a decline of 96% [201]. - TurnOnGreen's revenues increased by $0.5 million, to $1.7 million for the three months ended September 30, 2025, compared to $1.2 million in the corresponding period in 2024, a rise of 42% [204]. - Total revenue for the nine months ended September 30, 2025, was $75.2 million, a decrease of $12.0 million, or 14%, compared to $87.2 million in 2024 [223]. - Revenues from crypto assets mining decreased by $9.6 million, or 38%, to $15.6 million for the nine months ended September 30, 2025, compared to $25.2 million in 2024 [224]. - AGREE's hotel operations revenues increased by $0.8 million, or 6%, for the nine months ended September 30, 2025, compared to the same period in 2024 [226]. - Revenues from lending and trading activities decreased by $3.0 million to approximately $1.9 million for the nine months ended September 30, 2025, compared to the same period in 2024, a decline of 61% [227]. - Other revenues increased by $0.2 million to $2.1 million for the nine months ended September 30, 2025, compared to $1.9 million in the same period in 2024 [230]. Expenses and Losses - The company recognized a loss on impairment of property and equipment related to AGREE's real estate assets amounting to $8.0 million for the year ended December 31, 2024 [186]. - A gain of $10.0 million was recognized from the deconsolidation of AVLP, effective March 28, 2025 [187]. - The net loss attributable to common stockholders for the three months ended September 30, 2025, was $15.3 million, compared to a net loss of $26.9 million in the same period of 2024 [196]. - The company anticipates GIGA will emerge from bankruptcy on November 28, 2025, following the confirmation of its bankruptcy plan [184]. - Ault Lending is focused on maximizing stockholder value through various initiatives, including potential public offerings and sales of subsidiaries [191]. - Gross margins decreased to 26% for the three months ended September 30, 2025, compared to 28% for the same period in 2024, primarily due to unfavorable margins from crypto asset mining activities [206]. - Research and development expenses decreased by $3.0 million for the three months ended September 30, 2025, due to reduced expenditures on the Bitnile social gaming platform [207]. - Selling and marketing expenses increased by $2.6 million, or 55%, to $7.4 million for the three months ended September 30, 2025, compared to $4.8 million in the same period in 2024 [208]. - Gross margins decreased to 24% for the nine months ended September 30, 2025, down from 26% for the same period in 2024, primarily due to unfavorable margins from crypto asset mining operations [231]. - Research and development expenses decreased by $3.0 million for the nine months ended September 30, 2025, due to reduced expenditures on the Bitnile social gaming platform [232]. - Selling and marketing expenses increased by $3.5 million, or 28%, to $16.0 million for the nine months ended September 30, 2025, driven by higher advertising and promotion costs [233]. - General and administrative expenses decreased by $3.3 million to $30.4 million for the nine months ended September 30, 2025, primarily due to the deconsolidation of AVLP and Eco Pack [234]. Cash Flow - Net cash used in operating activities totaled $24.8 million for the nine months ended September 30, 2025, compared to $10.2 million for the same period in 2024 [249]. - Net cash used in investing activities was $12.9 million for the nine months ended September 30, 2025, compared to $11.8 million for the same period in 2024 [250]. - Net cash provided by financing activities was $60.4 million for the nine months ended September 30, 2025, compared to $22.6 million for the same period in 2024 [251]. - As of September 30, 2025, cash and cash equivalents were $24.8 million, up from $4.5 million as of December 31, 2024 [248]. Taxation - The effective tax rate from continuing operations was a provision of 0.5% for the nine months ended September 30, 2025, compared to 0.1% for the same period in 2024 [247].
Ault Alliance(AULT) - 2025 Q3 - Quarterly Report