Financial Performance - Total revenue for the three months ended September 30, 2021, was $(30.79) million, compared to $5.68 million in the same period of 2020, indicating a significant decline [211]. - Gross profit for the third quarter of 2021 was $(36.07) million, a decrease from a gross profit of $1.94 million in Q3 2020 [211]. - The net loss attributable to Ault Global Holdings for the three months ended September 30, 2021, was $(42.87) million, compared to $(16.74) million in the same period of 2020 [211]. - The net loss for the three months ended September 30, 2021, was $42.8 million compared to a net loss of $16.7 million for the same period in 2020 [229]. - Total revenue for the nine months ended September 30, 2021, was $24.3 million, up from $16.7 million for the same period in 2020 [232]. - Total revenue increased by $27.9 million, or 194%, to $44.6 million for the nine months ended September 30, 2021, compared to $16.7 million for the same period in 2020 [234]. - Net income for the nine months ended September 30, 2021, was $1.4 million, a significant improvement from a net loss of $24.6 million for the same period in 2020 [252]. Revenue Sources - Cryptocurrency mining revenue for the same period was $272,000, while lending and trading activities resulted in a loss of $(38.87) million [211]. - Ault Alliance reported revenues from cryptocurrency mining operations of $238,000 for the three months ended September 30, 2021, compared to nil for the same period in 2020 [217]. - Revenues from lending and trading activities decreased to negative $38.9 million for the three months ended September 30, 2021, from negative revenues of $29,000 for the same period in 2020, reflecting significant unrealized losses [218]. - Cryptocurrency mining operations generated $619,000 in revenue for the nine months ended September 30, 2021, compared to nil in the prior year [237]. - Revenues from lending and trading activities increased to $19.6 million for the nine months ended September 30, 2021, from a loss of $27,000 in the prior year [238]. Expenses - Operating expenses totaled $13.81 million for Q3 2021, compared to $3.57 million in Q3 2020, reflecting a substantial increase [211]. - Research and development expenses increased by $55,000 to $524,000 for the three months ended September 30, 2021, due to costs related to defense product development [221]. - Selling and marketing expenses rose by $1.7 million, or 667%, to $2.0 million for the three months ended September 30, 2021, driven by increased personnel costs [222]. - General and administrative expenses increased by $8.5 million or 298% to $11.3 million for the three months ended September 30, 2021, primarily due to non-cash stock compensation and performance bonuses [223]. - Research and development expenses rose by $285,000 to $1.7 million for the nine months ended September 30, 2021, primarily for electric vehicle charger product development [242]. - Selling and marketing expenses surged by $3.8 million, or 431%, to $4.7 million for the nine months ended September 30, 2021, due to increased personnel costs [243]. - General and administrative expenses increased by $15.7 million, or 182%, to $24.4 million for the nine months ended September 30, 2021, driven by non-cash stock compensation and performance bonuses [244]. Investments and Acquisitions - Ault Global acquired a 617,000 square foot data center in Michigan for $3.9 million, enhancing its operational capacity [199]. - The company executed contracts to purchase 4,000 Bitcoin miners for a gross purchase price of $27.3 million, with 1,000 units received by September 30, 2021 [199]. - The company recorded an unrealized loss of $(27.4) million related to its investment in Alzamend common stock during the three months ended September 30, 2021 [204]. - Ault Global's investment in Alzamend Neuro, Inc. resulted in an unrealized gain of $3.8 million during the nine months ended September 30, 2021 [202]. - The company anticipates future growth through acquisitions and strategic investments in various industries, including defense and telecommunications [208]. Financing Activities - In 2021, the company raised net cash of $151.1 million from financing activities, compared to $7.1 million in the same period of 2020 [259]. - As of September 30, 2021, the company sold 34.7 million shares of common stock for gross proceeds of $160.5 million under the 2021 Sales Agreement [259]. - The company believes its current cash on hand is sufficient to meet operating and capital requirements for at least the next twelve months [260]. - The company provided loans to AVLP in the principal amount of $13,924,136, which includes 12% convertible promissory notes and warrants to purchase 27,858,272 shares of AVLP common stock [264]. - The fair value of the company's investments in AVLP was assessed using both market and income approaches, considering factors such as forecasted revenues and operating margins [264]. - The company evaluated the disruptive nature of AVLP's Multiplex Laser Surface Enhancement plasma-laser system in its discounted cash flow analysis [265]. - The company has an 8% Secured Promissory Note from Ault & Company, with a principal amount of $2.5 million due on February 25, 2022 [258]. - The company purchased the Executive Chairman's California residence for $2.7 million as part of a relocation benefit [258].
Ault Alliance(AULT) - 2021 Q3 - Quarterly Report