Ault Alliance(AULT) - 2025 Q4 - Annual Report

Financing Activities - The company issued Convertible Notes totaling $12.8 million with an interest rate of 12.5% per annum, maturing on December 2, 2027[758]. - The company has entered into an At-the-Market Issuance Sales Agreement for Series D Preferred Stock with an aggregate offering price of up to $35.4 million[761]. - The company anticipates completing the planned divestiture of Ault Capital in 2027, focusing on AI data center and Bitcoin infrastructure[755]. - The company plans to maximize stockholder value through various initiatives, including public offerings and sales of partner companies[774]. Revenue Performance - Total revenue for the year ended December 31, 2025, was $102.1 million, a decrease of 4% from $106.7 million in 2024[782]. - Revenue from crypto assets mining decreased by $9.3 million, or 30%, to $21.3 million, primarily due to a decline in mined crypto assets and increased mining difficulty[783]. - Crane operations revenue declined by $2.0 million, or 4%, to $45.5 million, reflecting reduced demand from oil and gas customers amid market uncertainty[784]. - AGREE's hotel operations revenue increased by $0.9 million, or 5%, to $19.0 million, indicating improvements in occupancy and average daily rates[785]. - TurnOnGreen's revenue increased by $2.3 million, or 47%, to $7.2 million, driven by new and existing defense customers[786]. Expenses and Losses - General and administrative expenses rose by $14.8 million to $50.0 million, primarily due to higher salaries and performance-based bonuses[794]. - Selling and marketing expenses increased by $4.3 million, or 31%, to $18.3 million, attributed to higher advertising and promotional activities[795]. - Net loss attributable to common stockholders was $75.0 million for the year ended December 31, 2025, compared to a loss of $61.5 million in 2024[782]. - A total net loss on extinguishment of convertible notes of $3.4 million was recognized for the year ended December 31, 2025, which included a $1.4 million gain on extinguishment of debt from the conversion of senior secured convertible notes[804]. - A loss of $2.6 million was recognized in connection with the issuance of an amended and restated convertible promissory note with a principal amount of $3.5 million[806]. Cash Flow and Financial Position - As of December 31, 2025, cash and cash equivalents increased to $13.1 million from $4.5 million as of December 31, 2024, with total cash and cash equivalents rising to $49.2 million[814]. - Net cash used in operating activities totaled $62.5 million for the year ended December 31, 2025, compared to $19.4 million for the year ended December 31, 2024[815]. - Net cash used in investing activities was $70.2 million for the year ended December 31, 2025, compared to net cash provided by investing activities of $3.2 million for the year ended December 31, 2024[816]. - Net cash provided by financing activities was $156.3 million for the year ended December 31, 2025, compared to $25.8 million for the year ended December 31, 2024[819]. Gains and Impairments - The company recognized a gain of approximately $2.0 million upon the deconsolidation of Gresham, which was included in net gain from discontinued operations for the year ended December 31, 2024[764]. - The company recorded a loss on impairment of property and equipment related to AGREE's real estate assets amounting to $8.0 million during the year ended December 31, 2024[769]. - The company recognized a gain of $10.0 million in connection with the deconsolidation of AVLP for the year ended December 31, 2025[771]. - A gain of $10.0 million was recognized due to the deconsolidation of AVLP, which filed for liquidation under Chapter 7 of the U.S. Bankruptcy Code[809]. Tax and Market Sensitivity - The effective tax rate from continuing operations was a provision of 0.4% for the year ended December 31, 2025, compared to 0.1% for the year ended December 31, 2024[813]. - A hypothetical 10% change in the price of Bitcoin as of December 31, 2025, would have resulted in a change in the carrying value of approximately $4.6 million[827].