Financing Activities - The company raised approximately $177 million through the sale of about 317.9 million shares of common stock from the 2022 ATM Offering[688] - The company terminated the 2022 Sales Agreement after completing its capital raise, indicating a strategic shift in funding approach[688] - The company entered into a note purchase agreement for secured promissory notes totaling $11 million, with a 10% interest rate, secured by marketable securities and Bitcoin mining equipment[697] - The company entered a Securities Purchase Agreement for a secured promissory note totaling $17.5 million, with obligations to repay 80% of proceeds from future financings[705][707] - The company agreed to issue 11.6 million shares of common stock to an investor in exchange for the cancellation of outstanding warrants[707] - A private placement raised $10 million through the issuance of 100,000 shares of preferred stock, convertible into common stock at a price equal to 85% of the closing sale price[711][713] - The company executed a Share Exchange Agreement with BMI, resulting in the issuance of Series B and C Convertible Preferred Stock with a combined stated value of $100 million[709] - The Series B and C Preferred Stock are convertible into approximately 400 million shares of BMI common stock, representing about 92.4% of BMI's outstanding shares on a fully-diluted basis[709] - The company entered into a Securities Purchase Agreement on March 28, 2023, to issue 100,000 shares of preferred stock with a stated value of $100.00 each, including Series E, F, and G Convertible Preferred Stocks[768] - The principal face amount of the 3% Secured Promissory Notes issued on November 18, 2022, was $8,181,819, with a maturity date of May 18, 2023[764] - The Series E and F Preferred Stocks were purchased by canceling outstanding secured promissory notes totaling $8.4 million[769] - The company issued warrants to purchase approximately 9 million shares of common stock at prices of $0.45 and $0.75 per share as part of the loan agreement[763] - The company is required to make monthly payments starting at $0.6 million, increasing to $1.1 million by November 2023, as part of the loan repayment[763] Acquisitions and Partnerships - Ault Lending acquired a majority stake in The Singing Machine Company, a leader in consumer karaoke products, enhancing its portfolio[695] - Ault Energy was formed to partner with White River on drilling projects across 30,000 acres in Texas, Louisiana, and Mississippi, with an initial commitment of approximately $1 million[696] - Circle 8 acquired substantially all assets of Circle 8 Crane Services for Class D equity interests and potential cash earnout payments up to $2.1 million based on EBITDA targets over three years[704] Revenue and Financial Performance - Total revenue increased by $81.9 million, or 156%, to $134.3 million for the year ended December 31, 2022, compared to $52.4 million in 2021[728] - Revenue from cryptocurrency mining operations surged by $13.2 million, reaching $16.7 million in 2022, a 384% increase from $3.5 million in 2021[728] - Revenue from lending and trading activities rose to $36.6 million, an increase of $19.8 million or 117% compared to $16.9 million in 2021[728] - Gross profit for 2022 was $55.97 million, with gross margins decreasing to 41.7% from 54.5% in 2021[735] - Total operating expenses increased significantly to $196.1 million in 2022, up from $46.9 million in 2021, resulting in a loss from operations of $(140.2) million[728] - Loss from operations was $140.2 million for the year ended December 31, 2022, compared to a loss of $18.4 million for the year ended December 31, 2021, primarily due to increased operating expenses[747] - The company recorded a net loss of $189.8 million for the year ended December 31, 2022, compared to a net loss of $23.0 million in 2021[754] Cash Flow and Liquidity - Net cash provided by operating activities totaled $26.5 million for the year ended December 31, 2022, a significant improvement from net cash used of $61.7 million in 2021[756] - Net cash used in investing activities was $158.6 million for the year ended December 31, 2022, including $108.4 million for capital expenditures related to Bitcoin mining equipment[757] - The company had cash and cash equivalents of $10.5 million as of December 31, 2022, down from $15.9 million at the end of 2021[755] - The company anticipates that current cash on hand is insufficient to fund planned operations for at least one year after the issuance of the consolidated financial statements[768] Expenses and Impairments - Research and development expenses rose to $2.8 million in 2022, an increase of $0.7 million from $2.0 million in 2021, driven by product development efforts[736] - Selling and marketing expenses surged to $29.4 million, a 278% increase from $7.8 million in 2021, primarily due to higher advertising costs[737] - General and administrative expenses increased to $67.3 million, an 84% rise from $36.7 million in 2021, attributed to various acquisitions and increased operational costs[738] - A goodwill impairment charge of $3.2 million was recognized for SMC due to adverse changes in business climate and a decline in sales[740] - GIGA recognized a non-cash impairment charge of $9.9 million for goodwill during the year ended December 31, 2022, due to fair value not exceeding carrying amounts[743] - The company recorded an impairment charge of $79.6 million for Bitcoin mining equipment, reducing its net carrying value to estimated fair value as of December 31, 2022[745] Strategic Initiatives - The company is pursuing strategies to maximize stockholder value, including potential public offerings and sales of subsidiaries or partner companies[720][721] - The company plans to continue expanding its market presence through acquisitions and product development initiatives[729] - The company is actively conducting due diligence on third parties in the crypto asset space to mitigate potential liquidity or insolvency risks[700] - The company has not been materially impacted by recent bankruptcies in the crypto assets industry, maintaining its asset recovery and liquidity[700]
Ault Alliance(AULT) - 2022 Q4 - Annual Report