Financial Performance - Total revenue for the year ended December 31, 2020, increased by $1,509,283, or 7%, to $23,871,277 from $22,361,994 in 2019 [404]. - Gresham Worldwide (GWW) revenue increased by $2,980,878, or 20%, to $18,212,721 for the year ended December 31, 2020, compared to $15,231,843 in 2019 [406]. - Coolisys revenue decreased by $409,528, or 7%, to $5,416,138 for the year ended December 31, 2020, from $5,825,666 in 2019 [407]. - Revenue from cryptocurrency mining operations decreased by $641,745, or 100%, due to the cessation of operations in 2020 [407]. - Revenue from lending and investing activities decreased by $420,322, or 63%, to $242,418 for the year ended December 31, 2020, from $662,740 in 2019 [408]. - Gross margins increased to 31.5% for the year ended December 31, 2020, compared to 13.7% in 2019 [409]. - The net loss for the year ended December 31, 2020, was $32,728,629, compared to a net loss of $32,945,828 for the year ended December 31, 2019 [424]. Expenses - General and administrative expenses decreased by $2,997,325 to $12,526,855 for the year ended December 31, 2020, from $15,524,180 in 2019 [412]. - Engineering and product development expenses slightly decreased by $12,237 to $1,848,866 for the year ended December 31, 2020 [410]. - Selling and marketing expenses were $1,177,321 for the year ended December 31, 2020, a decrease of $232,675 from $1,409,996 in 2019 [411]. - Interest income decreased to $104,869 for the year ended December 31, 2020, from $3,351,226 for the year ended December 31, 2019, primarily due to the impaired status of the AVLP loan [416]. - Interest expense increased to $9,648,820 for the year ended December 31, 2020, compared to $7,261,857 for the year ended December 31, 2019, mainly due to increased amortization of debt discount [417]. - The company recognized a loss on extinguishment of debt of $18,706,488 for the year ended December 31, 2020, compared to $966,134 for the year ended December 31, 2019 [422]. Cash Flow and Financing - Cash and cash equivalents increased to $18,679,848 as of December 31, 2020, from $483,383 as of December 31, 2019, primarily due to financing activities [429]. - Net cash used in continuing operating activities totaled $11,182,225 for the year ended December 31, 2020, compared to $10,262,733 for the year ended December 31, 2019 [430]. - Net cash used in investing activities was $7,783,215 for the year ended December 31, 2020, compared to $2,851,055 for the year ended December 31, 2019, largely due to acquisitions [431]. - Net cash provided by financing activities was $37,283,639 for the year ended December 31, 2020, compared to $12,925,203 for the year ended December 31, 2019 [432]. - The Company entered into a sales agreement allowing for the sale of up to $125,000,000 in common stock, having sold 21,561,900 shares for gross proceeds of $124,983,305 as of February 22, 2021 [436]. - The Company believes its current cash on hand is sufficient to meet operating and capital requirements for at least the next twelve months [437]. Acquisitions and Investments - The company acquired a 617,000 square foot energy-efficient facility in southern Michigan for a purchase price of $3,991,497, paid using its own working capital [382]. - The acquisition of Relec Electronics Ltd. was completed for approximately £3,000,000 plus Relec's cash balance prior to closing [380]. - The company has provided loans to AVLP totaling $11,269,136, including 12% convertible promissory notes and warrants for 22,537,871 shares at an exercise price of $0.50 per share [439]. COVID-19 Impact - The company experienced a significant decrease in revenue due to COVID-19 disruptions, particularly affecting assembly operations at Microphase, leading to deferred order completion and delayed shipments [390]. - Microphase's production facility temporarily shut down for a week in December 2020 for deep cleaning after five employees tested positive for COVID-19, impacting revenue forecasts for December 2020 [390]. - The company has been following local health authority recommendations to minimize COVID-19 exposure risk, including remote work arrangements for employees [387]. - The company expects business to rebound and resume substantial growth in the second quarter of 2021 as orders increase to address deferred demand [395]. Corporate Structure and Forward-Looking Statements - The company reorganized its corporate structure to align various businesses by the products and services that constitute the majority of each subsidiary's revenues [375]. - The company has no obligation to update forward-looking statements unless required by law, highlighting the inherent uncertainties in predicting future performance [371]. Non-Cash Charges and Fair Value Assessment - The company recorded non-cash charges of $29,325,236 for the year ended December 31, 2020, compared to $11,435,682 for the year ended December 31, 2019 [426]. - Other comprehensive loss was $28,952,560 for the year ended December 31, 2020, compared to $34,538,451 for the year ended December 31, 2019 [428]. - The fair value of financial instruments is assessed using a three-tier hierarchy to maximize observable inputs and minimize unobservable inputs [438]. - The discounted cash flow analysis for AVLP's technology considered market size, customer demand, and performance capabilities of the MLSE system [440].
Ault Alliance(AULT) - 2020 Q4 - Annual Report