Hyperscale Data Inc
For the period ended Sep 30, 2024. Filed Nov 19, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Nov 19, 2024
GPUS$0.14-2.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-16.
0001214659-24-014883
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-19.
0001214659-24-019389
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 113 previous paragraphs and 131 current paragraphs.
55 unchanged; 42 reworded; 33 added; 10 removed; 6 previous and 1 current paragraphs rearranged.
Tables are not compared: 24 previous and 22 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (33)
Current report
On September 27, 2024, Ault Disruptive announced that it will redeem all of its outstanding shares of common stock which occurred as of the close of business on October 11, 2024, because Ault Disruptive would not consummate an initial business combination within the time period required by its Amended and Restated Certificate of Incorporation, as amended. During the nine months ended September 30, 2024, shares of Ault Disruptive common stock were redeemed for an aggregate redemption amount of $1.5 million.
Current report
On October 11, 2024, all remaining shares of Ault Disruptive common stock were redeemed for a redemption amount of $0.8 million.
Current report
On September 17, 2024, the loan and guarantee agreement, dated as of December 14, 2023, as amended, pursuant to which we have guaranteed financial obligations of Ault & Company borrowings, was amended regarding our obligations to fund the restricted cash Segregated Account.
Current report
We agreed to deposit in the Segregated Account: (i) $0.4 million monthly commencing on September 30, 2024 and ending on February 28, 2025; and (ii) $0.5 million monthly commencing on March 31, 2025 and ending on the earlier of the term loan maturity date, prepayment of the term loan in full or the date on which the balance of the Segregated Account exceeds 110% of the outstanding balance of the term loan. As of September 30, 2024 we had deposited $6.5 million in the Segregated Account. In October 2024, we deposited an additional $0.4 million in the Segregated Account.
Current report
On August 2, 2024, pursuant to the November 2023 SPA we entered into with Ault & Company, we sold 300 shares of Series C Convertible Preferred Stock and warrants to purchase 0.1 million shares of common stock to Ault & Company, for a purchase price of $0.3 million.
Current report
In October and November 2024, we sold to Ault & Company an aggregate of 2,230 shares of Series C Preferred Stock and Warrants to purchase 0.7 million shares of Class A common stock, for a total purchase price of $2.2 million.
Current report
On November 11, 2024 we filed a Certificate of Designation, Rights and Preferences (the “Certificate of Designation”) with the Secretary of State of the State of Delaware to establish the preferences, voting powers, limitations as to dividends or other distributions, qualifications, terms and conditions of redemption and other terms and conditions of our Series E Preferred Stock. The following is a summary description of those terms and the general effect of the issuance of the shares of Series E Preferred Stock on our other classes of registered securities.
Current report
The Series E Preferred Stock will, as to dividend rights and rights as to the distribution of assets upon our liquidation, dissolution or winding-up, rank: (1) senior to all classes or series of Common Stock and to all other equity securities issued by us other than equity securities referred to in clauses (2) and (3); (2) on parity with any future class or series of our equity securities expressly designated as ranking on parity with the Series E Preferred Stock, (3) junior to our Series A Cumulative Redeemable Perpetual Preferred Stock and its Series C Convertible Preferred Stock; and all equity securities issued by us expressly designated as ranking senior to the Series E Preferred Stock; and (4) junior to all our existing and future indebtedness.
Current report
To the extent the shares of Series E Preferred Stock are issued, we will pay cumulative cash dividends on the Series E Preferred Stock when, as and if declared by its board of directors (or a duly authorized committee of its board of directors), only out of funds legally available for payment of dividends. Dividends on the Series E Preferred Stock will accrue on the stated amount of $25.00 per share of the Series E Preferred Stock at a rate per annum equal to 10.00% (equivalent to $3.00 per year), payable monthly in arrears.
Current report
The Series E Preferred Stock is redeemable by us. Holders of shares of the Series E Preferred Stock generally will have no voting rights, except as required by law and as provided in the Certificate of Designation. Voting rights for holders of the Series E Preferred Stock exist primarily with respect to material and adverse changes in the terms of the Series E Preferred Stock and the creation of additional classes or series of preferred stock that rank senior to the Series E Preferred Stock.
Current report
Further, unless we have received the approval of two-thirds of the votes entitled to be cast by the holders of Series E Preferred Stock, we will not effect any consummation of a binding share exchange or reclassification of the Series E Preferred Stock or a merger or consolidation of us with another entity, unless (a) the shares of Series E Preferred Stock remain outstanding or, in the case of a merger or consolidation with respect to which we are not the surviving entity, the shares of Series E Preferred Stock are converted into or exchanged for preference securities, or (b) such shares remain outstanding or such preference securities are not materially less favorable than the Series E Preferred Stock immediately prior to such consummation.
Current report
At the June 28, 2024 annual meeting of stockholders, voted upon and approved Proposal 5, an amendment to our Certificate of Incorporation to effect a Reverse Split with a ratio of not less than one-for-two and not more than one-for-thirty-five at any time prior to June 27, 2025, with the exact ratio to be set at a whole number within this range as determined by our board of directors in its sole discretion.
Current report
On October 24, 2024, the board of directors authorized a special committee of the board to determine the ratio of the reverse split. On November 8, 2024, the special committee approved a one-for-thirty-five reverse split of the Class A common stock that will be effective in the State of Delaware on Friday, November 22, 2024. We anticipate that beginning with the opening of trading on Monday, November 25, 2024, our Class A common stock will trade on the NYSE American on a split-adjusted basis.
Current report
On November 15, 2024, we announced that we plan to issue a special one-time dividend (the “Distribution”) of 5.0 million shares of our Class B Common Stock (the “Class B Common Stock”) to all holders of our Class A Common Stock (the “Class A Common Stock”) and the Series C Convertible Preferred Stock on an as-converted basis.
Current report
The record date for the Distribution is November 29, 2024. Stockholders who own our Class A Common Stock at the close of trading on that date will be eligible to receive the shares of Class B Common Stock. Further, we have set a payment date of December 16, 2024, subject to adjustment. On the record date, we anticipate there will be approximately 1.1 million shares of Class A Common Stock and approximately 5.9 million Class A Common Stock equivalents, based on the current conversion price of our Series C Convertible Preferred Stock, issued and outstanding (collectively, the “Eligible Capital Stock”), for an aggregate of approximately 7.0 million shares of Eligible Capital Stock. Consequently, the number of shares of Class B Common Stock issuable is approximately 0.71 for each share of Eligible Capital Stock. The foregoing figures reflect the implementation of the one-for-thirty-five reserve stock split that will be effectuated on November 25, 2024.
Current report
The Class B Common Stock is identical to the currently outstanding Class A Common Stock, with the exception that each share thereof carries ten times the voting power of a share of Class A Common Stock. The Class B Common Stock is convertible at any time after the payment date into Class A Common Stock on a one-for-one basis.
Current report
Presentation of GIGA as Discontinued Operations
Current report
On August 14, 2024, our majority owned subsidiary, Gresham Worldwide, Inc. (“GIGA”), filed a petition for reorganization under Chapter 11 of the bankruptcy laws. The filing placed GIGA under the control of the bankruptcy court, which oversees its reorganization and restructuring process. We assessed the inherent uncertainties associated with the outcome of the Chapter 11 reorganization process and the anticipated duration thereof, and concluded that it was appropriate to deconsolidate GIGA and its subsidiaries effective on the petition date. We recognized a gain on deconsolidation of GIGA of $2.0 million included in net gain (loss) from discontinued operations.
Current report
In connection with the Chapter 11 reorganization process, we concluded that the operations of GIGA met the criteria for discontinued operations as this strategic shift that will have a significant effect on our operations and financial results. As a result, we have presented the results of operations, cash flows and financial position of GIGA as discontinued operations in the accompanying consolidated financial statements and notes for all periods presented.
Current report
Energy revenues from Circle 8’s crane operations decreased by $0.2 million, or 1%, for the three months ended September 30, 2024, remaining essentially flat compared to the prior period.
Current report
Revenues from our lending and trading activities were $5.6 million for the three months ended September 30, 2024, driven primarily by $2.6 million in realized gains from trading activities, $2.6 million in fee income, and $0.6 million in unrealized gains on investment positions. In comparison, revenues from lending and trading activities for the same period in 2023 were negative $0.2 million, due to a $3.0 million unrealized loss from our investment in Alzamend and $0.8 million in net unrealized losses on investments in marketable equity securities, partially offset by $3.0 million in realized gains from trading activities and $0.5 million dividend income.
Current report
Gross margins rose to 28% for the three months ended September 30, 2024, compared to 20% for the same period in 2023. This increase was influenced by our lending and trading activities, which contributed favorably in 2024 but had a negative impact in 2023. In both periods, gross margins were adversely affected by negative margins from our crypto assets mining operations. Excluding the impacts of both our lending and trading activities and our crypto assets mining operations, adjusted gross margins for the three months ended September 30, 2024, and 2023 would have been 38% and 33%, respectively. Gross margins improved due to the deconsolidation of the lower margin of SMC business.
Current report
Partially offset by:
Current report
Impairment of Property and Equipment
Current report
During the three months ended September 30, 2024, due to increases in the Bitcoin mining difficulty level, which compounded the continued impact of the Bitcoin halving event, we concluded that indicated that an impairment triggering event had occurred. Testing performed indicated the estimated fair value of our miners to be less than their net carrying value as of September 30, 2024, and an impairment charge of $10.5 million was recognized, decreasing the net carrying value of our crypto assets mining equipment to their estimated fair value.
Current report
In addition, we recorded $1.2 million in impairment charges related to real estate assets of AGREE during the three months ended September 30, 2024.
Current report
During the three months ended September 30, 2024, an investor converted $0.7 million of a convertible note into 3.0 million shares of Class A common stock that had a fair value of $0.9 million at the time of conversion and we recognized a $0.2 million loss on extinguishment of debt.
Current report
Results of Operations for the Nine Months Ended September 30, 2024 and 2023
Current report
Impairment of Property and Equipment
Current report
During the three months ended September 30, 2024, due to increases in the Bitcoin mining difficulty level, which compounded the continued impact of the Bitcoin halving event, we concluded that indicated that an impairment triggering event had occurred. Testing performed indicated the estimated fair value of our miners to be less than their net carrying value as of September 30, 2024, and an impairment charge of $10.5 million was recognized, decreasing the net carrying value of our crypto assets mining equipment to their estimated fair value.
Current report
In addition, we recorded $9.2 million in impairment charges related to real estate assets of AGREE during the nine months ended September 30, 2024.
Current report
During the three months ended September 30, 2024, an investor converted $0.7 million of a convertible note into 3.0 million shares of Class A common stock that had a fair value of $0.9 million at the time of conversion and we recognized a $0.2 million loss on extinguishment of debt.
Current report
Net cash provided by financing activities for the nine months ended September 30, 2024 included $2.6 million cash provided by financing activities from discontinued operations.
Removed paragraphs (10)
Previous report
On August 16, 2024, we agreed to deposit, by no later than September 1, 2024, an additional $1.5 million into the Segregated Account as well as make a modification payment to the institutional lenders in the amount of $0.3 million by no later than September 15, 2024. As a result of the foregoing amendments, we are required to deposit additional incremental amounts such that at or prior to the nine-month anniversary, the one-year anniversary and the two-year anniversary of December 14, 2023, we shall have deposited the required funds such that the balance in the Segregated Account shall not be less than $15.0 million, $20.0 million and $27.5 million, respectively.
Previous report
Revenues from our lending and trading activities were negative $9.8 million for the three months ended June 30, 2024, primarily due to a $9.4 million unrealized loss on 2.5 million shares of White River Energy Corp. (“White River”) common stock and a $0.5 million unrealized loss from our investment in Alzamend included in revenue from lending and trading activities. Revenues from our lending and trading activities were $9.5 million for the three months ended June 30, 2023, due to an aggregate $6.6 million of net realized gains and $1.5 million of net unrealized gains on our investments in marketable equity securities, and a $1.5 million unrealized gain from our investment in Alzamend.
Previous report
GIGA
Previous report
For the three-month period ending June 30, 2024, GIGA revenues increased by $1.9 million. This growth is driven by ongoing global conflicts and tensions, which have spurred investments in force protection technologies in the United States, U.K., Europe, Asia and the Middle East.
Previous report
Gross margins decreased to (2%) for the three months ended June 30, 2024, compared to 38% for the three months ended June 30, 2023. Our gross margins recognized during the three months ended June 30, 2024 and 2023 were impacted by margins from our lending and trading activities, with a negative impact during the three months ended June 30, 2024 and a positive impact during the three months ended June 30, 2023. Excluding the effects of margin from our lending and trading activities, our adjusted gross margins for the three months ended June 30, 2024 and 2023 would have been 24% and 22%, respectively. Our gross margins (excluding the effects of margin from our lending and trading activities) improved, in part, due to high margin revenue from Sentinum digital mining equipment hosted at third-party facilities.
Previous report
Results of Operations for the Six Months Ended June 30, 2024 and 2023
Previous report
Energy revenues from the Circle 8 crane operations increased by $0.6 million, or 2%, for the six months ended June 30, 2024. This increase reflects higher crane service utilization from Circle 8’s largest customer during the six months ended June 30, 2024.
Previous report
GIGA
Previous report
For the six-month period ending June 30, 2024, GIGA revenues increased by $2.7 million. This growth is driven by ongoing global conflicts and tensions, which have spurred investments in force protection technologies in the United States, U.K., Europe, Asia and the Middle East.
Previous report
On July 2, 2024, we entered into a term note agreement with institutional investors of up to $2.6 million, of which the principal amount of $1.8 million was immediately funded. The term note was issued at a discount, with net proceeds to us of $1.5 million. The term note does not accrue any interest. The term note was scheduled to mature on August 2, 2024. The term note is guaranteed by Mr. Ault. The term note is in default and a default fee of $0.2 million accrues monthly until the term note is paid in full.
Reworded paragraphs (42)
Previous wording
In this quarterly report on Form 10-Q (the “Quarterly Report”), the “Company,” “AAI,” “we,” “us” and “our” refer to Ault Alliance, Inc., a Delaware corporation. AAI is a diversified holding company pursuing growth by acquiring undervalued businesses and disruptive technologies with a global impact. Through our wholly and majority owned subsidiaries and strategic investments, we own and operate a data center at which we mine Bitcoin and offer colocation and hosting services for the emerging artificial intelligence ecosystems and other industries, and provide mission-critical products that support a diverse range of industries, including metaverse platform, oil exploration, crane services, defense/aerospace, industrial, automotive, medical/biopharma, hotel operations and textiles. In addition, we own and operate hotels and extend credit to select entrepreneurial businesses through a licensed lending subsidiary.
Current wording
In this quarterly report on Form 10-Q (the “Quarterly Report”), the “Company,” “Hyperscale Data,” “we,” “us” and “our” refer to Hyperscale Data, Inc., a Delaware corporation. Hyperscale Data is a diversified holding company pursuing growth by acquiring undervalued businesses and disruptive technologies with a global impact. Through our wholly and majority owned subsidiaries and strategic investments, we own and operate a data center at which we mine Bitcoin and offer colocation and hosting services for the emerging artificial intelligence ecosystems and other industries, and provide mission-critical products that support a diverse range of industries, including metaverse platform, oil exploration, crane services, defense/aerospace, industrial, automotive, medical/biopharma and hotel operations. In addition, we own and operate hotels and extend credit to select entrepreneurial businesses through a licensed lending subsidiary.
Previous wording
Pursuant to the 2023 Loan Agreement, the Guarantors, as well as Milton C. Ault, III, our Executive Chairman and the Chief Executive Officer of Ault & Company, agreed to act as guarantors for repayment of the Secured Notes. In addition, certain Guarantors entered into various agreements as collateral in support of the guarantee of the Secured Notes, including (i) a security agreement by Sentinum, pursuant to which Sentinum granted to the Lenders a security interest in (a) 19,226 Antminers (the “Miners”), (b) all of the digital currency mined or otherwise generated from the Miners and (c) the membership interests of ACS, (ii) a security agreement by the Company, Ault Lending, BNI Montana and AGREE, pursuant to which those entities granted to the lenders a security interest in substantially all of their assets, as well as a pledge of equity interests in Ault Aviation, AGREE, Sentinum, Third Avenue, Ault Energy, LLC, our wholly owned subsidiary (“Ault Energy”), ADTC, Eco Pack, and Circle 8 Holdco, (iii) a mortgage and security agreement by Third Avenue on the real estate property owned by Third Avenue in St. Petersburg, Florida (the “Florida Property”), (iv) a future advance mortgage by ACS on the real estate property owned by ACS in Dowagiac, Michigan (the “Michigan Property”), (v) an aircraft mortgage and security agreement by Ault Aviation on a private aircraft owned by Ault Aviation (the “Aircraft”), and (vi) deposit account control agreements over certain bank accounts held by certain of our subsidiaries.
Current wording
Pursuant to the 2023 Loan Agreement, the Guarantors, as well as Milton C. Ault, III, our Executive Chairman and the Chief Executive Officer of Ault & Company, agreed to act as guarantors for repayment of the Secured Notes. In addition, certain Guarantors entered into various agreements as collateral in support of the guarantee of the Secured Notes, including (i) a security agreement by Sentinum, pursuant to which Sentinum granted to the Lenders a security interest in (a) 19,226 Antminers (the “Miners”), (b) all of the crypto currency mined or otherwise generated from the Miners and (c) the membership interests of ACS, (ii) a security agreement by the Company, Ault Lending, BNI Montana and AGREE, pursuant to which those entities granted to the lenders a security interest in substantially all of their assets, as well as a pledge of equity interests in Ault Aviation, AGREE, Sentinum, Third Avenue, Ault Energy, LLC, our wholly owned subsidiary (“Ault Energy”), ADTC, Eco Pack, and Circle 8 Holdco, (iii) a mortgage and security agreement by Third Avenue on the real estate property owned by Third Avenue in St. Petersburg, Florida (the “Florida Property”), (iv) a future advance mortgage by ACS on the real estate property owned by ACS in Dowagiac, Michigan (the “Michigan Property”), (v) an aircraft mortgage and security agreement by Ault Aviation on a private aircraft owned by Ault Aviation (the “Aircraft”), and (vi) deposit account control agreements over certain bank accounts held by certain of our subsidiaries.
Previous wording
Pursuant to the Merger Agreement and subject to the terms and conditions set forth therein, the Merger Sub was intended to merge with and into GIGA (the “Merger”), with GIGA being the surviving corporation and thereby becoming a wholly owned subsidiary of Ault Disruptive. Upon the Closing of the Business Combination (the “Effective Time”), it was expected that Ault Disruptive
Current wording
Pursuant to the Merger Agreement and subject to the terms and conditions set forth therein, the Merger Sub was intended to merge with and into GIGA (the “Merger”), with GIGA being the surviving corporation and thereby becoming a wholly owned subsidiary of Ault Disruptive. Upon the Closing of the Business Combination (the “Effective Time”), it was expected that Ault Disruptive would be renamed Gresham Worldwide, Inc., and thereafter remain listed on the NYSE American under a new ticker symbol, “GWWI.”
Previous wording
However, on August 14, 2024, GIGA filed a petition for reorganization under Chapter XI of the bankruptcy laws. Consequently, Ault Disruptive was required to terminate the Merger Agreement, which it did on August 15, 2024. Ault Disruptive does not presently intend to enter into a new agreement and plan of merger with a third party.
Current wording
However, on August 14, 2024, GIGA filed a petition for reorganization under Chapter 11 of the bankruptcy laws. Consequently, Ault Disruptive was required to terminate the Merger Agreement, which it did on August 15, 2024. Ault Disruptive does not presently intend to enter into a new agreement and plan of merger with a third party.
Previous wording
For presentation purposes, the assets and liabilities previously held for sale as of December 31, 2023, were reclassified in the December 31, 2023 balance sheet in the accompanying financial statements back to their original asset and liability groups at their previous carrying values. In connection with this change in plan of sale, we recorded a loss on impairment of property and equipment related to the real estate assets of AGREE of $8.0 million during the three months ended June 30, 2024.
Current wording
For presentation purposes, the assets and liabilities previously held for sale as of December 31, 2023, were reclassified in the December 31, 2023 balance sheet in the accompanying financial statements back to their original asset and liability groups at their previous carrying values. In connection with this change in plan of sale, we recorded a loss on impairment of property and equipment related to the real estate assets of AGREE of $8.0 million during the nine months ended September 30, 2024.
Previous wording
In recent years, we have provided capital and relevant expertise to fuel the growth of businesses in metaverse platform, oil exploration, crane services, defense/aerospace, industrial, automotive, medical/biopharma, hotel operations and textiles. We have provided capital to subsidiaries as well as partner companies in which we have an equity interest or may be actively involved, influencing development through board representation and management support.
Current wording
In recent years, we have provided capital and relevant expertise to fuel the growth of businesses in metaverse platform, oil exploration, crane services, defense/aerospace, industrial, automotive, medical/biopharma and hotel operations. We have provided capital to subsidiaries as well as partner companies in which we have an equity interest or may be actively involved, influencing development through board representation and management support.
Previous wording
We are a Delaware corporation with our corporate office located at 11411 Southern Highlands Pkwy, Suite 240, Las Vegas, NV 89141. Our phone number is 949-444-5464 and our website address is www.ault.com.
Current wording
We are a Delaware corporation with our corporate office located at 11411 Southern Highlands Pkwy, Suite 240, Las Vegas, NV 89141. Our phone number is 949-444-5464 and our website address is www.hyperscaledata.com.
Previous wording
Revenues from Sentinum’s digital assets mining operations increased $0.1 million due primarily to a $1.2 million increase in revenue from Sentinum digital mining equipment hosted at third-party facilities and a 134% increase in the average Bitcoin price, partially offset by a 71% increase in the average Bitcoin mining difficulty level and the estimated $4.4 million unfavorable impact of the April 19, 2024 Bitcoin halving event occurred on the Bitcoin network.
Current wording
Revenues from Sentinum’s crypto assets mining operations decreased by $2.2 million, primarily due to an estimated $5.3 million unfavorable impact from the April 19, 2024 Bitcoin halving event on the Bitcoin network, coupled with a 76% increase in the average Bitcoin mining difficulty level for the three months ended September 30, 2024, compared to the corresponding period in 2023. This decrease was partially offset by a 128% increase in the average Bitcoin price and a $0.3 million reduction in revenue from Sentinum’s crypto mining equipment hosted at third-party facilities for the three months ended September 30, 2024, compared to the corresponding period in 2023.
Previous wording
Halving is a key part of the Bitcoin protocol and serves to control the overall supply and reduce the risk of inflation in digital assets using a proof-of-work consensus algorithm. The Bitcoin halving event reduced the block subsidy by half from 6.25 to 3.125 Bitcoin. Transaction fees were not directly impacted by the halving.
Current wording
Halving is a key part of the Bitcoin protocol and serves to control the overall supply and reduce the risk of inflation in crypto assets using a proof-of-work consensus algorithm. The Bitcoin halving event reduced the block subsidy by half from 6.25 to 3.125 Bitcoin. Transaction fees were not directly impacted by the halving.
Previous wording
Due to the significant change in our ownership and voting rights, we determined that we no longer met the criteria of the primary beneficiary and, accordingly, we deconsolidated SMC as of November 20, 2023. SMC revenues were $0 for the three months ended June 30, 2024, a decrease of $2.6 million compared to the corresponding period in 2023.
Current wording
Due to the significant change in our ownership and voting rights, we determined that we no longer met the criteria of the primary beneficiary and, accordingly, we deconsolidated SMC as of November 20, 2023. SMC revenues were $0 for the three months ended September 30, 2024, a decrease of $15.9 million compared to the corresponding period in 2023.
Previous wording
TurnOnGreen's revenues increased by $0.5 million for the three months ended June 30, 2024, compared to the corresponding period in 2023. This rise was primarily due to higher sales from a single, higher-margin customer in the defense industry during the three months ended June 30, 2024.
Current wording
TurnOnGreen's revenues increased by $0.1 million for the three months ended September 30, 2024, compared to the corresponding period in 2023. This rise was primarily due to higher sales from a single, higher-margin customer in the defense industry during the three months ended September 30, 2024.
Previous wording
Research and development expenses decreased by $1.0 million for the three months ended June 30, 2024, due to lower expenditures related to development work on ROI’s BitNile metaverse platform.
Current wording
Research and development expenses increased by $3.5 million for the three months ended September 30, 2024, due to increased expenditures related to development work on ROI’s BitNile gaming platform.
Previous wording
Selling and marketing expenses were $4.0 million for the three months ended June 30, 2024, compared to $9.6 million for the three months ended June 30, 2023, a decrease of $5.6 million, or 58%. The decrease was primarily the result of a $4.8 million decrease in sales and marketing expenses at ROI primarily due to lower advertising and promotion costs and a $0.4 million decrease in sales and marketing expenses from SMC due to thedeconsolidation of SMC as of November 20, 2023.
Current wording
Selling and marketing expenses were $4.8 million for the three months ended September 30, 2024, compared to $7.6 million for the three months ended September 30, 2023, a decrease of $2.9 million, or 38%. The decrease was primarily the result of a $2.0 million decrease in sales and marketing expenses at ROI primarily due to lower advertising and promotion costs and a $1.2 million decrease in sales and marketing expenses from SMC due to thedeconsolidation of SMC as of November 20, 2023.
Previous wording
General and administrative expenses were $13.5 million for the three months ended June 30, 2024, compared to $21.3 million for the three months ended June 30, 2023, a decrease of $7.8 million, or 37%. General and administrative expenses decreased from the comparative prior period, mainly due to the following:
Current wording
General and administrative expenses were $12.0 million for the three months ended September 30, 2024, compared to $16.3 million for the three months ended September 30, 2023, a decrease of $4.3 million, or 27%. General and administrative expenses decreased from the comparative prior period, mainly due to the following:
Previous wording
Other expense, net was $12.8 million for the three months ended June 30, 2024, compared to other expense, net of $12.4 million for the three months ended June 30, 2023.
Current wording
Other expense, net was $7.2 million for the three months ended September 30, 2024, compared to other expense, net of $6.9 million for the three months ended September 30, 2023.
Previous wording
Interest expense was $5.4 million for the three months ended June 30, 2024, compared to $15.9 million for the three months ended June 30, 2023. Interest expense for the three months ended June 30, 2024 included contractual interest of $3.3 million, amortization of debt discount of $1.3 million and forbearance and extension fees of $0.8 million. Interest expense for the three months ended June 30, 2023 included amortization of debt discount of $7.2 million, forbearance and extension fees of $6.2 million and contractual interest of $2.5 million.
Current wording
Interest expense was $7.8 million for the three months ended September 30, 2024, compared to $6.1 million for the three months ended September 30, 2023. Interest expense for the three months ended September 30, 2024 included contractual interest of $5.4 million, amortization of debt discount of $1.4 million and forbearance and extension fees of $1.1 million. Interest expense for the three months ended September 30, 2023 included contractual interest of $5.0 million, amortization of debt discount of $0.6 million and forbearance and extension fees of $0.5 million.
Previous wording
The income tax provision was $24,000 and $1.4 million during the three months ended June 30, 2024 and 2023, respectively. The effective income tax provision rate was 0.1% and 2.2% for the three months ended June 30, 2024 and 2023, respectively. The lower income tax provision during the three months ended June 30, 2024 related primarily to lower dividend income compared to the prior year period as a result of the decline in cash and marketable securities held in the trust account as a result of redemptions of Ault Disruptive common stock subject to possible redemption.
Current wording
The income tax provision (benefit) was $52,000 and ($0.6) million during the three months ended September 30, 2024 and 2023, respectively. The effective income tax provision (benefit) rate was 0.2% and (2.1%) for the three months ended September 30, 2024 and 2023, respectively. The lower income tax provision during the three months ended September 30, 2024 related primarily to lower dividend income compared to the prior year period as a result of the decline in cash and marketable securities held in the trust account as a result of redemptions of Ault Disruptive common stock subject to possible redemption.
Previous wording
The following table summarizes the results of our operations for the six months ended June 30, 2024 and 2023.
Current wording
The following table summarizes the results of our operations for the nine months ended September 30, 2024 and 2023.
Previous wording
Revenues by segment for the six months ended June 30, 2024 and 2023 were as follows:
Current wording
Revenues by segment for the nine months ended September 30, 2024 and 2023 were as follows:
Previous wording
Revenues from Sentinum’s digital assets mining operations increased $4.2 million due primarily to a $3.7 million increase in revenue from Sentinum digital mining equipment hosted at third-party facilities and a 134% increase in the average Bitcoin price, partially offset by an 84% increase in the average Bitcoin mining difficulty level and the impact of the April 19, 2024 Bitcoin halving event occurred on the Bitcoin network.
Current wording
Revenues from Sentinum’s crypto assets mining operations increased $4.2 million due primarily to a $3.5 million increase in revenue from Sentinum crypto mining equipment hosted at third-party facilities and a 128% increase in the average Bitcoin price, partially offset by an 76% increase in the average Bitcoin mining difficulty level for the nine months ended September 30, 2024, compared to the corresponding period in 2023, and an $9.7 million unfavorable impact from the April 19, 2024 Bitcoin halving event occurred on the Bitcoin network.
Previous wording
Energy revenues from the Circle 8 crane operations decreased by $0.9 million, or 7%, for the three months ended June 30, 2024. This decrease was primarily due to lower utilization of the crane fleet, as five cranes were out of service during the three months ended June 30, 2024.
Current wording
Energy revenues from Circle 8’s crane operations decreased by $0.8 million, or 2%, for the nine months ended September 30, 2024, remaining essentially flat compared to the prior period. This decrease was primarily due to lower utilization of the crane fleet, as five cranes were out of service during the three months ended June 30, 2024.
Previous wording
Revenues from our lending and trading activities were negative $0.7 million for the six months ended June 30, 2024, primarily due to a $0.4 million unrealized loss from our investment in Alzamend included in revenue from lending and trading activities. Revenues from our lending and trading activities were $4.6 million for the six months ended June 30, 2023, due to an aggregate $6.8 million of net realized and unrealized gains on our investments in marketable equity securities, a $0.6 million unrealized loss from our investment in Alzamend, and a $2.0 million impairment related to investments in equity securities.
Current wording
Revenues from our lending and trading activities were $4.9 million for the nine months ended September 30, 2024, driven primarily by $2.5 million in realized gains from trading activities and $2.7 million in fee income, partially offset by a $0.6 million unrealized loss from our investment in Alzamend. In comparison, revenues from lending and trading activities for the same period in 2023 were $4.3 million, driven primarily by $8.5 million in net realized and unrealized gains on investments in marketable equity securities and $1.6 million in dividend income, partially offset by a $3.6 million unrealized loss from our investment in Alzamend and a $2.0 million impairment for equity securities that do not have readily determinable fair values related to Fintech lending operations.
Previous wording
Revenues from our trading activities for the six months ended June 30, 2024 included net gains on equity securities, including unrealized gains and losses from market price changes. These gains and losses have caused, and will continue to cause, significant volatility in our periodic earnings.
Current wording
Revenues from our trading activities for the nine months ended September 30, 2024 included net gains on equity securities, including unrealized gains and losses from market price changes. These gains and losses have caused, and will continue to cause, significant volatility in our periodic earnings.
Previous wording
Due to the significant change in our ownership and voting rights, we determined that we no longer met the criteria of the primary beneficiary and, accordingly, we deconsolidated SMC as of November 20, 2023. SMC revenues were $0 for the six months ended June 30, 2024, a decrease of $6.0 million compared to the corresponding period in 2023.
Current wording
Due to the significant change in our ownership and voting rights, we determined that we no longer met the criteria of the primary beneficiary and, accordingly, we deconsolidated SMC as of November 20, 2023. SMC revenues were $0 for the nine months ended September 30, 2024, a decrease of $21.9 million compared to the corresponding period in 2023.
Previous wording
TurnOnGreen's revenues increased by $0.9 million for the six months ended June 30, 2024, compared to the corresponding period in 2023. This rise was primarily due to higher sales from a single, higher-margin customer in the defense industry during the six months ended June 30, 2024.
Current wording
TurnOnGreen's revenues increased by $1.0 million for the nine months ended September 30, 2024, compared to the corresponding period in 2023. This rise was primarily due to higher sales from a single, higher-margin customer in the defense industry during the nine months ended September 30, 2024.
Previous wording
Gross margins were 25% for the six months ended June 30, 2024, compared to 25% for the six months ended June 30, 2023. Our gross margins during the six months ended June 30, 2024 and 2023 were unfavorably impacted by margins from our lending and trading activities. Excluding the effects of margin from our lending and trading activities, our adjusted gross margins for the six months ended June 30, 2024 and 2023 would have been 26% and 22%, respectively. Our gross margins improved, in part, due to high margin revenue from Sentinum digital mining equipment hosted at third-party facilities.
Current wording
Gross margins rose to 26% for the nine months ended September 30, 2024, compared to 23% for the same period in 2023. This increase was influenced by our lending and trading activities, which contributed favorably to our gross margins for the nine months ended September 30, 2024 and 2023. In both periods, gross margins were adversely affected by negative margins from our crypto assets mining operations. Excluding the impacts of both our lending and trading activities and our crypto assets mining operations, adjusted gross margins for the nine months ended September 30, 2024, and 2023 would have been 36% and 33%, respectively. Gross margins improved due to the deconsolidation of the lower margin of SMC business.
Previous wording
Research and development expenses decreased by $1.7 million for the six months ended June 30, 2024, due to lower expenditures related to development work on ROI’s BitNile metaverse platform.
Current wording
Research and development expenses increased by $1.5 million for the nine months ended September 30, 2024, due to increased expenditures primarily related to development work on ROI’s BitNile gaming platform.
Previous wording
Selling and marketing expenses were $8.7 million for the six months ended June 30, 2024, compared to $18.4 million for the six months ended June 30, 2023, a decrease of $9.7 million, or 53%. The decrease was primarily the result of an $8.2 million decrease in sales and marketing expenses at ROI primarily due to lower advertising and promotion costs and a $1.3 million decrease in sales and marketing expenses from SMC due to thedeconsolidation of SMC as of November 20, 2023.
Current wording
Selling and marketing expenses were $12.5 million for the nine months ended September 30, 2024, compared to $25.0 million for the nine months ended September 30, 2023, a decrease of $12.5 million, or 48%. The decrease was primarily the result of an $10.2 million decrease in sales and marketing expenses at ROI primarily due to lower advertising and promotion costs and a $2.4 million decrease in sales and marketing expenses from SMC due to thedeconsolidation of SMC as of November 20, 2023.
Previous wording
General and administrative expenses were $26.8 million for the six months ended June 30, 2024, compared to $44.0 million for the six months ended June 30, 2023, a decrease of $17.2 million, or 39%. General and administrative expenses decreased from the comparative prior period, mainly due to the following:
Current wording
General and administrative expenses were $33.7 million for the nine months ended September 30, 2024, compared to $53.1 million for the nine months ended September 30, 2023, a decrease of $19.3 million, or 36%. General and administrative expenses decreased from the comparative prior period, mainly due to the following:
Previous wording
Other expense, net was $3.5 million for the six months ended June 30, 2024, compared to other expense, net of $30.1 million for the six months ended June 30, 2023.
Current wording
Other expense, net was $9.5 million for the nine months ended September 30, 2024, compared to other expense, net of $37.4 million for the nine months ended September 30, 2023.
Previous wording
Interest and other income was $0.8 million for the three months ended June 30, 2024, compared to $2.2 million for the three months ended June 30, 2023. The decrease in interest and other income is primarily due to the decline in Ault Disruptive’s interest income as a result of the decline in cash and marketable securities held in the trust account as a result of redemptions of Ault Disruptive common stock subject to possible redemption.
Current wording
Interest and other income was $2.1 million for the nine months ended September 30, 2024, compared to $3.6 million for the nine months ended September 30, 2023. The decrease in interest and other income is primarily due to the decline in Ault Disruptive’s interest income as a result of the decline in cash and marketable securities held in the trust account as a result of redemptions of Ault Disruptive common stock subject to possible redemption.
Previous wording
Interest expense was $12.3 million for the six months ended June 30, 2024, compared to $29.7 million for the six months ended June 30, 2023. Interest expense for the six months ended June 30, 2024 included contractual interest of $6.6 million, amortization of debt discount of $3.4 million, and forbearance and extension fees of $2.3 million. Interest expense for the six months ended June 30, 2023 included amortization of debt discount of $16.2 million, forbearance and extension fees of $7.5 million, and contractual interest of $5.9 million.
Current wording
Interest expense was $18.8 million for the nine months ended September 30, 2024, compared to $35.2 million for the nine months ended September 30, 2023. Interest expense for the nine months ended September 30, 2024 included contractual interest of $10.7 million, amortization of debt discount of $4.8 million, and forbearance and extension fees of $3.3 million. Interest expense for the nine months ended September 30, 2023 included amortization of debt discount of $18.2 million, contractual interest of $9.6 million and forbearance and extension fees of $7.3 million.
Previous wording
Gain on conversion of investment in equity securities to marketable equity securities of $17.9 million relates to ROI conversion of White River common stock. During the six months ended June 30, 2024, ROI transferred 14.5 million shares of White River common stock with a fair value of $19.2 million at the date of transfer. In conjunction with the transfers, ROI converted a portion of their White River’s Series A Convertible Preferred Stock into common stock and recorded a noncash $17.9 million gain on conversion.
Current wording
Gain on conversion of investment in equity securities to marketable equity securities of $17.9 million relates to ROI conversion of White River common stock. During the nine months ended September 30, 2024, ROI transferred 14.5 million shares of White River common stock with a fair value of $19.2 million at the date of transfer. In conjunction with the transfers, ROI converted a portion of their White River’s Series A Convertible Preferred Stock into common stock and recorded a noncash $17.9 million gain on conversion.
Previous wording
Loss from investment in unconsolidated entity was $2.0 million for the six months ended June 30, 2024, representing our share of losses from our equity method investment in SMC.
Current wording
Loss from investment in unconsolidated entity was $2.0 million for the nine months ended September 30, 2024, representing our share of losses from our equity method investment in SMC.
Previous wording
For the six months ended June 30, 2024, the provision for loan losses on the related party note receivable from Ault & Company was $3.1 million, due to uncertainties regarding collection. This compares to no provision for the same period in 2023.
Current wording
For the nine months ended September 30, 2024, the provision for loan losses on the related party note receivable from Ault & Company was $3.1 million, due to uncertainties regarding collection. This compares to no provision for the same period in 2023.
Previous wording
Cumulative downward adjustments for impairments for our equity securities without readily determinable fair values held at were $6.3 million for the three months ended June 30, 2024.
Current wording
Cumulative downward adjustments for impairments for our equity securities without readily determinable fair values held at were $6.3 million for the nine months ended September 30, 2024.
Previous wording
The income tax provision (benefit) was ($20,000) and $1.1 million during the six months ended June 30, 2024 and 2023, respectively. The effective income tax (benefit) provision rate was (0.1%) and 1.0% for the six months ended June 30, 2024 and 2023, respectively. The lower income tax provision during the six months ended June 30, 2024 related primarily to lower dividend income compared to the prior year period as a result of the decline in cash and marketable securities held in the trust account as a result of redemptions of Ault Disruptive common stock subject to possible redemption.
Current wording
The income tax provision was $47,000 and $0.5 million during the nine months ended September 30, 2024 and 2023, respectively. The effective income tax provision rate was 0.1% and 0.4% for the nine months ended September 30, 2024 and 2023, respectively. The lower income tax provision during the nine months ended September 30, 2024 related primarily to lower dividend income compared to the prior year period as a result of the decline in cash and marketable securities held in the trust account as a result of redemptions of Ault Disruptive common stock subject to possible redemption.
Previous wording
On June 30, 2024, we had cash and cash equivalents of $9.6 million (excluding restricted cash of $7.3 million), compared to cash and cash equivalents of $9.7 million (excluding restricted cash of $5.7 million) at December 31, 2023. The decrease in cash and cash equivalents was primarily due to the payment of debt, purchases of property and equipment and cash used in operating activities, partially offset by cash provided by financing activities related to the sale of common and preferred stock, as well as proceeds from notes payable and convertible notes.
Current wording
On September 30, 2024, we had cash and cash equivalents of $7.2 million (excluding restricted cash of $8.3 million), compared to cash and cash equivalents of $6.1 million (excluding restricted cash of $5.0 million) at December 31, 2023. The increase in cash and cash equivalents was primarily due to cash provided by financing activities related to the sale of common and preferred stock, as well as proceeds from notes payable and convertible notes, partially offset by the payment of debt, purchases of property and equipment and cash used in operating activities.
Previous wording
Net cash used in operating activities totaled $13.9 million for the six months ended June 30, 2024, compared to net cash provided by operating activities of $12.9 million for the six months ended June 30, 2023. Cash used in operating activities for the six months ended June 30, 2024 included $15.5 million proceeds from the sale of digital assets from our Sentinum Bitcoin mining operations, offset by operating losses and changes in working capital.
Current wording
Net cash used in operating activities totaled $10.2 million for the nine months ended September 30, 2024, compared to $2.2 million for the nine months ended September 30, 2023. Cash used in operating activities for the nine months ended September 30, 2024 included $20.0 million proceeds from the sale of crypto assets from our Sentinum crypto assets mining operations, offset by operating losses and changes in working capital. Net cash used in operating activities for the nine months ended September 30, 2024 included $6.4 million cash used in operating activities from discontinued operations.
Previous wording
Net cash used in investing activities was $3.8 million for the six months ended June 30, 2024, compared to $18.9 million for the six months ended June 30, 2023. Net cash used in investing activities for the six months ended June 30, 2024 was primarily related to $3.9 million capital expenditures.
Current wording
Net cash used in investing activities was $11.8 million for the nine months ended September 30, 2024, compared to $22.9 million for the nine months ended September 30, 2023. Net cash used in investing activities for the nine months ended September 30, 2024 was primarily related to $4.8 million capital expenditures. Net cash used in investing activities for the nine months ended September 30, 2024 included $3.8 million cash used in investing activities from discontinued operations.
Showing the first 40 of 42 pairs. Open the source sections for the rest.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Interest and other income was $0.8 million for the three months ended September 30, 2024, compared to $0.3 million for the three months ended September 30, 2023.
Rearranged previous paragraphs (6)
Previous report — wording carried elsewhere
would be renamed Gresham Worldwide, Inc., and thereafter remain listed on the NYSE American under a new ticker symbol, “GWWI.”
Previous report — wording carried elsewhere
During the three months ended June 30, 2024, holders of our convertible notes converted $2.0 million of convertible notes that had a fair value of $2.7 million at the time of conversion and recognized a $0.7 million loss on extinguishment of debt.
Previous report — wording carried elsewhere
Loss from investment in unconsolidated entity was $1.3 million for the three months ended June 30, 2024, representing our share of losses from our equity method investment in SMC.
Previous report — wording carried elsewhere
Interest and other income was $1.4 million for the six months ended June 30, 2024, compared to $3.3 million for the six months ended June 30, 2023. The decrease in interest and other income is primarily due to the decline in Ault Disruptive’s interest income as a result of the decline in cash and marketable securities held in the trust account as a result of redemptions of Ault Disruptive common stock subject to possible redemption.
Previous report — wording carried elsewhere
Cumulative downward adjustments for impairments for our equity securities without readily determinable fair values held at were $6.3 million for the six months ended June 30, 2024.
Previous report — wording carried elsewhere
On July 18, 2024, we entered into a note purchase agreement with an institutional investor pursuant to which the institutional investor agreed to acquire, and we agreed to issue and sell in a registered direct offering to the institutional investor, the OID Note. The OID Note was sold to the institutional investor for a purchase price of $4.9 million, an original issue discount of $0.5 million. The OID Note will accrue interest at the rate of 15% per annum, unless an event of default occurs, at which time the OID Note would accrue interest at 18% per annum. The OID Note will mature on October 19, 2024. In addition, the OID Note is convertible at any time after NYSE American approval of a Supplemental Listing Application into shares of our common stock at the OID Conversion Price, subject to adjustment. However, we may not issue shares of common stock upon conversion of the OID Note to the extent such issuance would result in an aggregate number of shares of common stock exceeding the NYSE Limit unless we first obtain Stockholder Approval.