Hyperscale Data, Inc.

HYPERSCALE DATA, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2025

1. DESCRIPTION OF BUSINESS

Hyperscale Data, Inc. (“Hyperscale Data” or the “Company”) is a Delaware corporation that owns and operates data center infrastructure supporting digital asset mining operations. While the Company has completed initial deployments supporting high-density computing workloads for third-party customers, its current operations are primarily focused on Bitcoin mining and the accumulation of digital assets through its wholly owned subsidiary, Sentinum, Inc. (“Sentinum”), which operates facilities providing power and related infrastructure.

Through its other wholly owned subsidiary, Ault Capital Group, Inc. (“Ault Capital”), the Company holds a portfolio of diversified businesses and strategic investments spanning commercial lending and trading, hotel operations, crane rental, software platforms and commercial electronics. The Company anticipates completing the planned divestiture of Ault Capital in 2027, at which time it expects to operate as a more focused data center infrastructure-oriented business.

The Company has the following reportable segments:

2. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”).

Principles of Consolidation

The consolidated financial statements include the accounts of Hyperscale Data and its wholly owned and majority-owned subsidiaries. The consolidated financial statements also include the accounts of all entities that the Company controls as the primary beneficiary of a variable interest entity (“VIE”). All intercompany accounts and transactions have been eliminated upon consolidation.

The accounting guidance requires an enterprise to perform an analysis to determine whether the enterprise’s variable interest or interests give it a controlling financial interest in a variable interest entity; to require ongoing reassessments of whether an enterprise is the primary beneficiary of a VIE; to eliminate the solely quantitative approach previously required for determining the primary beneficiary of a VIE; to add an additional reconsideration event for determining whether an entity is a VIE when any changes in facts and circumstances occur such that holders of the equity investment at risk, as a group, lose the power from voting rights or similar rights of those investments to direct the activities of the entity that most significantly impact the entity’s economic performance; and to require enhanced disclosures that will provide readers of financial statements with more transparent information about an enterprise’s involvement in a VIE.

Variable Interest Entities

For VIEs, the Company assesses whether it is the primary beneficiary as prescribed by the accounting guidance on the consolidation of a VIE.

The Company evaluates its business relationships with related parties to identify potential VIEs under Accounting Standards Codification (“ASC”) 810,Consolidation. The Company consolidates VIEs of which the Company is considered to be the primary beneficiary. Entities are considered to be the primary beneficiary if they have both of the following characteristics: (i) the power to direct the activities that, when taken together, most significantly impact the VIE’s performance; and (ii) the obligation to absorb losses and right to receive the returns from the VIE that would be significant to the VIE. The Company’s judgment with respect to its level of influence or control of an entity involves the consideration of various factors including the form of its ownership interest, its representation in the entity’s governance, the size of its investment, estimates of future cash flows, its ability to participate in policy making decisions and the rights of the other investors to participate in the decision making process and to replace the Company as manager and/or liquidate the joint venture, if applicable.

Revenue Recognition

The Company recognizes revenue under ASC 606,Revenue from Contracts with Customers(“ASC 606”). The core principle of ASC 606 is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The following five steps are applied to achieve that core principle:

Crane Operations - Heavy Lifting and Pump Maintenance Services

The Company generates revenue by providing heavy lifting and pump maintenance services to customers under various short-term agreements which may be hourly, daily, weekly or monthly. Each service agreement generally has one performance obligation and includes a promise to complete the service at a specified location and time and identifies the billing rate to be charged. Payment terms are identified in the terms of the contract and agreed to by both parties for each promised service within the contract prior to the commencement or performance of said services. The collectability of payment is considered probable based on management’s history with the certain type and class of customers and their ability and intention of payment. The customer simultaneously receives and consumes the benefits as the Company provides the hourly, daily, weekly or monthly service.

Crypto Assets Mining

The Company has entered into a crypto assets mining pool by executing a contract with a mining pool operator to provide hash calculation services to the mining pool. The Company’s customer, as defined in ASC 606-10-20, is the mining pool operator with which the Company has agreed to the terms of service and user service agreement. The Company supplies hash calculation services, in exchange for consideration, to the pool operator who in turn provides transaction verification services to third parties via a mining pool that includes other participants. The Company’s performance obligation is the provision of hash calculation services to the pool operator and this performance obligation is an output of the Company’s ordinary activities for which it decides when to provide services under the contract.

The Company’s enforceable right to compensation begins only when, and lasts as long as, the Company provides hash calculation services to the mining pool operator and is created as power is provided over time. The only consideration due to the Company relates to the provision of hash calculation services. The contract with the pool operator provides both parties the unilateral enforceable right to terminate the contract at any time without penalty. The customer termination option results in a contract that continuously renews throughout the day and therefore has a duration of less than 24 hours. The implied renewal option is not a material right because there are no upfront or incremental fees in the initial contract and the terms, conditions, and compensation amount for the renewal options are at the then market rates. Providing such hash calculation services is the only performance obligation in the Company’s contracts with mining pool operators.

The transaction consideration the Company receives, if any, is non-cash consideration in the form of Bitcoin. Changes in the fair value of the non-cash consideration due to form of the consideration (changes in the market price of Bitcoin) are not included in the transaction price and are therefore not included in revenue. The mining pool operator charges fees to cover the costs of maintaining the pool and are deducted from amounts the Company may otherwise earn and are treated as a reduction to the consideration earned. Fees fluctuate and historically have been approximately 0.3% per reward earned, on average.

The Company participated in mining pools that used the full pay-per-share (“FPPS”) payout method for the year ended December 31, 2025. The Company is entitled to compensation once it begins to perform hash calculations for the pool operator in accordance with the operator’s specifications over a 24-hour period beginning midnight UTC and ending 23:59:59 UTC on a daily basis. The non-cash consideration that the Company is entitled to for providing hash calculations to the pool operator under the FPPS payout method is made up of block rewards and transaction fees less pool operator fees determined as follows:

The contract is in effect until terminated by either party.

All consideration pursuant to this arrangement is variable. It is not probable that a significant reversal of cumulative revenue will occur. The Company is able to calculate the payout based on the contractual formula, non-cash revenue is estimated and recognized based on the fair value of Bitcoin on the date of contract inception. Fair value of the crypto assets consideration is determined using the midnight UTC spot price of the Company’s principal market for Bitcoin. The Company recognizes non-cash consideration on the same day that control of the contracted service is transferred to the pool operator, which is the same day as the contract inception.

There is no significant financing component in these transactions.

Expenses associated with running the crypto assets mining business, such as equipment depreciation and electricity costs, are recorded as a component of cost of revenues.

Hotel Operations

The primary sources of revenue include room and food and beverage revenue from the Company’s hotels.

Rooms revenue represents revenue from the occupancy of the Company’s hotel rooms, which is driven by the occupancy and average daily rate charged. Rooms revenue includes revenue from guest no-shows, daily use, and early/late departure fees. The contracts for room stays with customers are generally short in duration and revenues are recognized as services are provided over the course of the hotel stay at the daily transaction price agreed to under the contract.

Food and beverage revenue consists of revenue from the restaurants and lounges, in room dining and mini bars, and banquet/catering revenue from group and social functions. Payment of the transaction price is due immediately when the customer purchases the goods and services. Therefore, revenue is recognized at a point in time when the physical possession has transferred to the customer.

Sales of Products

The Company generates revenues from the sale of its products through a direct and indirect sales force. The Company’s performance obligations to deliver products are satisfied at the point in time when title transfers to the customer. Generally, products are shipped FOB shipping point and title transfers to the customer at the time the products are placed on a common carrier. The Company provides standard assurance warranties, which are not separately priced, that the products function as intended. The Company primarily receives fixed consideration for sales of products. Some of the Company’s contracts with distributors include stock rotation rights after six months for slow-moving inventory, which represents variable consideration. The Company uses an expected value method to estimate variable consideration and constrains revenue for estimated stock rotations until it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur. To date, returns have been insignificant. The Company’s customers generally pay within 30 days from the receipt of an invoice.

Because the Company’s product sales agreements have an expected duration of one year or less, the Company has elected to adopt the practical expedient in ASC 606-10-50-14(a) of not disclosing information about its remaining performance obligations.

Manufacturing Services

For manufacturing and development services, which include revenues generated by the Company’s subsidiary, Enertec Systems 2001 Ltd. (“Enertec”), the Company’s performance obligation for manufacturing services is satisfied over time as the Company creates or enhances an asset based on criteria that are unique to the customer and that the customer controls as the asset is created or enhanced. Generally, the Company recognizes revenue based upon proportional performance over time using a cost-to-cost method that measures progress based on the costs incurred to total expected costs in satisfying its performance obligation. This method provides a depiction of the progress in providing the manufacturing service because there is a direct relationship between the costs incurred by the Company and the transfer of the manufacturing service to the customer. Manufacturing services that are recognized based upon the proportional performance method are considered revenue from services transferred over time and to the extent the customer has not been invoiced for these revenues, as accrued revenue in the accompanying consolidated balance sheets. Revisions to the Company’s estimates may result in increases or decreases to revenues and income and are reflected in the consolidated financial statements in the periods in which they are first identified.

The Company has elected the practical expedient to not adjust the promised amount of consideration for the effects of a significant financing component to the extent that the period between when the Company transfers its promised good or service to the customer and when the customer pays in one year or less.

Lending and Trading Activities

Lending Activities

The Fintech segment, through Ault Lending, LLC (“Ault Lending”), generates revenue from lending activities primarily through interest, origination fees and late/other fees. Interest income on these products is calculated based on the contractual interest rate and recorded as interest income as earned. The origination fees or original issue discounts (“OIDs”) are recognized over the life of the loan using the effective interest method.

Trading Activities

The Fintech segment, through Ault Lending, also generates revenue from trading activities primarily through sales of securities and unrealized gains and losses from held securities. All investment transactions are recorded on a trade date basis. Financial instruments utilized in trading activities are carried at fair value. For more information on fair value, see Note 7. Fair Value of Financial Instruments. Trading-related revenue can be volatile and is largely driven by general market conditions. Also, trading-related revenue is dependent on the volume and type of transactions, the level of risk assumed, and the volatility of price and rate movements at any given time within the ever-changing market environment. Realized and unrealized gains and losses are recognized in revenue from trading activities.

Cash and Cash Equivalents

The Company considers all highly liquid investments with a maturity of three months or less at the time of purchase to be cash equivalents. Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash and cash equivalents. The Company’s cash is maintained in checking accounts, money market funds and certificates of deposits with reputable financial institutions. These balances exceed the United States (“U.S.”) Federal Deposit Insurance Corporation insurance limits. The Company has not experienced any losses on deposits of cash and cash equivalents.

Restricted Cash

As of December 31, 2025, restricted cash included $33.3 million related to the Company’s guarantee obligations, $2.0 million of cash collateral for notes payable and $0.8 million of cash held in trust related to environmental contingencies related to the Michigan data center. As of December 31, 2024, restricted cash included $18.4 million related to the Company’sguarantee obligations, $1.3 million of cash collateral for notes payable and $0.8 million of cash held in trust related to environmental contingencies related to the Michigan data center.

Cash, cash equivalents and restricted cash consisted of the following:

Crypto Assets

Bitcoin, the Company’s primary crypto asset, is obtained through both its mining activities and strategic open market purchases. Bitcoin earned through mining activities is accounted for in connection with the Company’s revenue recognition policy.

In accordance with Accounting Standards Update (“ASU”) 2023-08,Accounting for and Disclosure of Crypto Assets, the Company measures Bitcoin at fair value with changes recognized in operating expenses on the consolidated statements of operations.

The Company tracks the cost basis of its Bitcoin holdings on a wallet-by-wallet basis. When Bitcoin is sold, the Company determines the cost basis of the specific units sold using the first-in, first-out method.

Sales of Bitcoin by the Company and Bitcoin awarded to the Company are included within cash flows from operating activities on the consolidated statements of cash flows. Realized gains or losses from sales of Bitcoin are included in loss from operations on the consolidated statements of operations.

Beginning during the year ended December 31, 2025, the Company began holding Bitcoin as part of a broader treasury strategy, including retaining Bitcoin generated from mining operations and making strategic open market purchases. While the Company continues to view Bitcoin as a long-term strategic asset, the classification of Bitcoin on the consolidated balance sheet reflects management’s assessment of expected liquidity needs and the potential for sale in the ordinary course of operations to support working capital requirements. Accordingly, as of December 31, 2025, Bitcoin crypto assets are classified as current assets on the consolidated balance sheet.

Fair Value of Financial Instruments

In accordance with ASC 820,Fair Value Measurements and Disclosures (“ASC 820”), fair value is defined as the exit price, or the amount that would be received for the sale of an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date.

The guidance also establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs include those that market participants would use in valuing the asset or liability and are developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the factors that market participants would use in valuing the asset or liability. The guidance establishes three levels of inputs that may be used to measure fair value:

The carrying amounts of financial instruments carried at cost, including cash and cash equivalents, accounts receivables and accounts and other receivable – related party, investments, notes receivable, trade payables and trade payables – related party approximate their fair value due to the short-term maturities of such instruments.

The categorization of a financial instrument within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

Equity Investments

The Company’s marketable equity securities are publicly traded stocks or funds measured at fair value and classified within Level 1 and 2 in the fair value hierarchy because the Company uses quoted prices for identical assets in active markets or inputs that are based upon quoted prices for similar instruments in active markets.

For investments where little or no public market exists, management’s determination of fair value is based on the best available information which may incorporate management’s own assumptions and involves a significant degree of judgment, taking into consideration various factors including earnings history, financial condition, recent sales prices of the issuer’s securities and liquidity risks.

Other equity securities also include investments in entities that do not have a readily determinable fair value and do not report net asset value per share. These investments are accounted for using a measurement alternative under which they are measured at cost and adjusted for observable price changes and impairments. Observable price changes result from, among other things, equity transactions for the same issuer executed during the reporting period, including subsequent equity offerings or other reported equity transactions related to the same issuer. For these transactions to be considered observable price changes of the same issuer, the Company evaluates whether these transactions have similar rights and obligations, including voting rights, distribution preferences, conversion rights, and other factors, to the investments the Company holds. Any investments adjusted to their fair value by applying the measurement alternative are disclosed as nonrecurring fair value measurements, including the level in the fair value hierarchy that was used.

Accounts Receivable and Allowance for Credit Losses

The Company’s receivables are recorded when invoiced and represent claims against third parties that will be settled in cash. The Company records accounts receivable at the invoiced amount less an allowance for any potentially uncollectible accounts under the current expected credit loss impairment model and discloses the net amount of the financial instrument expected to be collected. The Company estimates the allowance for credit losses based on an ongoing review of existing economic conditions, the financial conditions of the customers, historical trends in credit losses, and the amount and age of past due accounts. Past-due receivable balances are written off when the Company’s internal collection efforts have been unsuccessful in collecting the amount due.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents and trade receivables.

Cash and cash equivalents are invested in banks in the U.S. Such deposits in the U.S. may be in excess of insured limits and are not insured in other jurisdictions.

Trade receivables of the Company and its subsidiaries are mainly derived from sales to customers located primarily in the U.S. The Company performs ongoing credit evaluations of its customers and to date has not experienced any material losses. An allowance for doubtful accounts is determined with respect to those amounts that the Company and its subsidiaries have determined to be doubtful of collection.

Inventories

Inventories are stated at the lower of cost or net realizable value. Inventory write-offs are provided to cover risks arising from slow-moving items or technological obsolescence.

Cost of inventories is determined as follows:

Raw materials, parts and supplies - using the first-in, first-out method; and

Finished products - on the basis of direct manufacturing costs with the addition of indirect manufacturing costs.

Inventories are stated at the lower of cost (first-in, first-out method) or net realizable value. Inbound shipping and handling costs are classified as a component of cost of revenues in the consolidated statements of operations. The Company reviews the components of its inventory and its inventory purchase commitments on a regular basis for excess and obsolete inventory based on estimated future usage and sales. Write-downs in inventory value or losses on inventory purchase commitments depend on various items, including factors related to customer demand, economic and competitive conditions, technological advances or new product introductions by the Company or its customers that vary from its current expectations. Whenever inventory is written down, a new cost basis is established and the inventory is not subsequently written up if market conditions improve.

Property and Equipment, Net

Property and equipment are stated at cost, net of accumulated depreciation. Gains or losses on disposals of property and equipment are recorded within income from operations. Repairs and maintenance costs are expensed as incurred. Significant improvements or betterments are capitalized and depreciated over the estimated life of the asset. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets, at the following annual rates:

Leases

The Company accounts for its leases under ASC 842,Leases. Under this guidance, arrangements meeting the definition of a lease are classified as operating or financing leases. The Company only has operating leases. Operating leases are recognized as right-of-use assets, operating lease liability, current, and operating lease liability, non-current on the Company’s consolidated balance sheets. Lease assets and liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As most of the Company’s leases do not provide an implicit rate, the Company uses the Company’s incremental borrowing rate based on the information available at commencement date in determining the present value of future payments. In certain of the Company’s lease agreements, the Company receives periods of reduced rent or free rent and other incentives. The Company recognizes lease costs on a straight-line basis over the lease term without regard to deferred payment terms, such as rent holidays, that defer the commencement date of required payments. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Leasehold improvements are capitalized at cost and amortized over the lesser of their expected useful life or the life of the lease, without assuming renewal features, if any, are exercised. The Company does not separate lease and non-lease components for the Company’s leases.

Impairment of Long-Lived Assets

Management reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to undiscounted expected future cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by comparing the carrying amount of the assets to their fair value.

Impairment of Debt Securities

Debt securities are evaluated periodically to determine whether a decline in their value is other than temporary. The Company utilizes criteria such as the magnitude and duration of the decline, in addition to the reason underlying the decline, to determine whether the loss in value is other than temporary. The term “other than temporary” is not intended to indicate that the decline is permanent. It indicates that the prospects for a near-term recovery of value are not necessarily favorable, or that there is a lack of evidence to support fair values equal to, or greater than, the carrying value of the investment. Once a decline in value is determined to be other than temporary, the value of the security is reduced and a corresponding charge to earnings is recognized.

Business Combination

The Company allocates the purchase price of an acquired business to the tangible and intangible assets acquired and liabilities assumed based upon their estimated fair values on the acquisition date. Any excess of the purchase price over the fair value of the net assets acquired is recorded as goodwill. The purchase price allocation process requires management to make significant estimates and assumptions at the acquisition date with respect to intangible assets. The allocation of the consideration transferred in certain cases may be subject to revision based on the final determination of fair values during the measurement period, which may be up to one year from the acquisition date. Direct transaction costs associated with the business combination are expensed as incurred. The Company includes the results of operations of the business that it has acquired in its consolidated results prospectively from the date of acquisition.

If the business combination is achieved in stages, the acquisition date carrying value of the acquirer’s previously held equity interest in the acquirer is re-measured to fair value at the acquisition date; any gains or losses arising from such re-measurement are recognized in profit or loss.

Intangible Assets

The Company acquired amortizable intangibles assets as part of asset purchase agreements consisting of customer relationships, trade names and proprietary technology.

The Company reviews intangible assets for impairment whenever events or changes in business circumstances indicate that the carrying amount of the assets might not be recoverable. Factors that the Company considers in deciding when to perform an impairment review include significant underperformance of the business in relation to expectations, significant negative industry or economic trends, and significant changes or planned changes in the use of the assets. If an impairment review is performed to evaluate a long-lived asset for recoverability, the Company compares forecasts of undiscounted cash flows expected to result from the use and eventual disposition of the long-lived asset to its carrying value. An impairment loss would be recognized when estimated undiscounted future cash flows expected to result from the use of an asset are less than its carrying amount. The impairment loss would be based on the excess of the carrying value of the impaired asset over its fair value, determined based on discounted cash flows.

Common Stock Purchase Warrants and Other Derivative Financial Instruments

The Company classifies common stock purchase warrants and other free standing derivative financial instruments as equity if the contracts (i) require physical settlement or net-share settlement or (ii) give the Company a choice of net-cash settlement or settlement in its own shares (physical settlement or net-share settlement). The Company classifies any contracts that (i) require net-cash settlement (including a requirement to net cash settle the contract if an event occurs and if that event is outside the control of the Company), (ii) give the counterparty a choice of net-cash settlement or settlement in shares (physical settlement or net-share settlement), or (iii) contain reset provisions, as either an asset or a liability. The Company assesses classification of its freestanding derivatives at each reporting date to determine whether a change in classification between assets and liabilities is required. The Company determined that certain freestanding derivatives, which principally consist of issuance of warrants to purchase shares of Class A common stock in connection with convertible notes and to employees of the Company, satisfy the criteria for classification as equity instruments as these warrants do not contain cash settlement features or variable settlement provisions that cause them to not be indexed to the Company’s own stock.

Fair Value Option

The Company has elected to record the senior secured convertible promissory notes, related party (“Convertible Notes”) at fair value on the date of issuance, with gains and losses arising from changes in fair value recognized in the consolidated statements of operations at each period end while those are outstanding. Issuance costs are recognized in the consolidated statement of operations in the period in which they are incurred. The Company utilized a Monte-Carlo simulation at inception to value the Convertible Notes. The Monte-Carlo simulation is calculated as the average present value over all simulated paths. The key inputs and assumptions used in the Monte-Carlo Simulation, including volatility, estimated market yield, risk-free rate, the probability of various scenarios, including held to maturity and subsequent preferred stock offering and various simulated paths.

The Company assesses the inputs used to measure fair value using the three-tier hierarchy based on the extent to which inputs used in measuring fair value are observable in the market. For instruments where little or no public market exists, management’s determination of fair value is based on the best available information which may incorporate management’s own assumptions and involves a significant degree of judgment, taking into consideration various factors including earnings history, financial condition, recent sales prices of the issuer’s securities and liquidity risks.

Convertible Instruments

The Company accounts for hybrid contracts that feature conversion options in accordance with ASC 815,Derivatives and Hedging Activities (“ASC 815”). ASC 815 requires companies to bifurcate conversion options from their host instruments and account for them as freestanding derivative financial instruments according to certain criteria. The criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable GAAP with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument.

Conversion options that contain variable settlement features such as provisions to adjust the conversion price upon subsequent issuances of equity or equity linked securities at exercise prices more favorable than that featured in the hybrid contract generally result in their bifurcation from the host instrument.

The Company accounts for convertible instruments, when the Company has determined that the embedded conversion options should not be bifurcated from their host instruments, in accordance with ASC 470-20,Debt with Conversion and Other Options (“ASC 470-20”). Under ASC 470-20, the Company records, when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. The Company accounts for convertible instruments (when the Company has determined that the embedded conversion options should be bifurcated from their host instruments) in accordance with ASC 815.

Debt Discounts

The Company accounts for debt discount according to ASC 470-20,Debt with Conversion and Other Options. Debt discounts are amortized through periodic charges to interest expense over the term of the related financial instrument using the effective interest method.

Guarantee Liability

The Company maintains a guarantee liability that represents its exposure related to guarantees associated with related party debt. The guarantee liability is reported in current liabilities as a separate line item on the consolidated balance sheets, and the provision for guarantee liability is reported in other income (expense) as a separate line item on the consolidated statement of operations. The guarantee liability represents management’s estimate of the Company’s exposure to losses pursuant to the Company’s related party guarantee obligations.

Redeemable Non-Controlling Interests in Equity of Subsidiary

The Company previously recorded a redeemable non-controlling interest in the equity of its subsidiary, Ault Disruptive, outside of permanent equity to reflect the redeemable nature of its public shares. During the year ended December 31, 2024, all remaining outstanding shares of Ault Disruptive common stock were redeemed for an aggregate redemption amount of $2.3 million.

Treasury Stock

The Company records the aggregate purchase price of treasury stock at cost and includes treasury stock as a reduction to stockholders’ equity.

Stock-Based Compensation

The Company accounts for stock-based compensation in accordance with ASC 718,Compensation – Stock Compensation (“ASC 718”).

The Company uses the Black-Scholes option pricing model for determining the estimated fair value for stock-based awards. The Black-Scholes model requires the use of assumptions which determine the fair value of stock-based awards, including the option’s expected term and the price volatility of the underlying stock.

Under ASC 718:

Income Taxes

The Company determines its income taxes under the asset and liability method in accordance with ASC 740,Income Taxes, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are based on the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the fiscal year in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the fiscal years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the Statements of Operations and Comprehensive Loss in the period that includes the enactment date.

The Company accounts for uncertain tax positions in accordance with ASC 740-10-25, which addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under ASC 740-10-25, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefit to be recognized is measured as the largest amount of benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. To the extent that the final tax outcome of these matters is different than the amount recorded, such differences impact income tax expense in the period in which such determination is made. Interest and penalties, if any, related to accrued liabilities for potential tax assessments are included in income tax expense. ASC 740-10-25 also requires management to evaluate tax positions taken by the Company and recognize a liability if the Company has taken uncertain tax positions that more likely than not would not be sustained upon examination by applicable taxing authorities. Management of the Company has evaluated tax positions taken by the Company and has concluded that as of December 31, 2025 and 2024, there wereno uncertain tax positions taken, or expected to be taken, that would require recognition of a liability that would require disclosure in the financial statements.

Foreign Currency Translation

A substantial portion of the Company’s revenues are generated in U.S. dollars. In addition, a substantial portion of the Company’s costs are incurred in U.S. dollars. Company management has determined that the U.S. dollar is the functional currency of the primary economic environment in which it operates.

Accordingly, monetary accounts maintained in currencies other than the U.S. dollar are re-measured into U.S. dollars in accordance with the Financial Accounting Standards Board (“FASB”) ASC 830,Foreign Currency Matters (“ASC 830”). All transaction gains and losses from the re-measurement of monetary balance sheet items are reflected in the statements of operations as financial income or expenses as appropriate.

The financial statements of certain foreign subsidiaries, whose functional currency is not the U.S. dollar, have been translated into U.S. dollars in accordance with ASC 830. Balance sheet accounts are translated using the exchange rates in effect as of the balance sheet date, while statement of operations amounts are translated at the average exchange rate for the reporting period. The resulting translation adjustments are recognized as other comprehensive loss in the consolidated statement of comprehensive loss and as accumulated comprehensive loss in the statement of changes in stockholders’ equity.

Comprehensive Loss

The Company reports comprehensive loss in accordance with ASC 220,Comprehensive Income. This statement establishes standards for the reporting and presentation of comprehensive loss and its components in a full set of general purpose financial statements. Comprehensive loss generally represents all changes in equity during the period except those resulting from investments by, or distributions to, stockholders. The Company determined that its items of other comprehensive loss relate to changes in foreign currency translation adjustments and impairment of debt securities.

Accounting Estimates

The preparation of the consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and reported amounts of revenue and expense during the reporting period. Estimates are used when accounting for certain items such as valuation of securities, reserves for trade receivables and inventories, intangible assets and goodwill, useful lives and the recoverability of long-lived assets, stock-based arrangements, contingent consideration, and deferred income taxes and related valuation allowance. Estimates are based on historical experience, where applicable, and assumptions that management believes are reasonable under the circumstances. Due to the inherent uncertainty involved with estimates, actual results may differ.

Preferred Stock Liabilities

The Company follows ASC 480-10,Distinguishing Liabilities from Equity, in its evaluation of the accounting for preferred stock liabilities. ASC 480-10-25-14 requires liability accounting for certain financial instruments, including shares that embody an unconditional obligation to transfer a variable number of shares, provided that the monetary value of the obligation is based solely or predominantly on one of the following three characteristics:

The number of shares delivered is determined on the basis of (1) the fixed monetary amount determined as the stated value and (2) the current stock price at settlement, so that the aggregate fair value of the shares delivered equals the monetary value of the obligation, which is fixed or predominantly fixed. Accordingly, the holder is not significantly exposed to gains and losses attributable to changes in the fair value of the Company’s equity shares. Instead, the Company is using its own equity shares as currency to settle a monetary obligation.

Discontinued Operations

The Company records discontinued operations when the disposal of a separately identified business unit constitutes a strategic shift in the Company’s operations, as defined in ASC 205-20, Discontinued Operations (“ASC 205-20”).

Reclassifications

Certain prior year amounts have been reclassified for comparative purposes to conform to the current-year financial statement presentation. These reclassifications had no effect on previously reported results of operations. The impact on any prior period disclosures was immaterial.

Recent Accounting Pronouncements

The Company continually assesses any new accounting pronouncements to determine their applicability. When it is determined that a new accounting pronouncement may affect the Company’s financial reporting, the Company undertakes an analysis to determine whether any required changes should be made to its consolidated financial statements.

Recently Adopted Accounting Standards

On December 14, 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”). ASU 2023-09 requires entities to disclose specific rate reconciliations, amount of income taxes separated by federal and individual jurisdiction, and the amount of income (loss) from continuing operations before income tax expense (benefit) disaggregated between federal, state, and foreign. The Company adopted ASU 2023-09 as required for the year ended December 31, 2025 under a prospective approach. The adoption of ASU 2023-09 did not have a material impact on the Company’s consolidated financial position, results of operations, or cash flows, as the standard primarily expands disclosure requirements.

Recently Issued Standards Not Yet Adopted

In November 2024, the FASB issued ASU No. 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”). ASU 2024-03 requires additional disclosures of certain expenses in the notes of the financial statements, to provide enhanced transparency into the expense captions presented on the Consolidated Statements of Operations. Additionally, in January 2025, the FASB issued ASU 2025-01, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40), to clarify the effective date of ASU 2024-03. The new standard is effective for the Company for its annual periods beginning January 1, 2027 and for interim periods beginning January 1, 2028, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2024-03; however, because the standard primarily affects disclosure requirements, the Company does not expect adoption to have a material impact on its consolidated financial position, results of operations, or cash flows.

3. DECONSOLIDATION AND RECONSOLIDATION OF SUBSIDIARIES

The Company experienced several changes in its consolidation conclusions during the years ended December 31, 2025 and 2024, including deconsolidations resulting from bankruptcy or liquidation proceedings, where control of the affected entities shifted to courts or creditors, and the reconsolidation of Gresham following its emergence from Chapter 11, when control reverted to the Company.

Deconsolidation of Avalanche International Corp. (“AVLP”)

On March 28, 2025, AVLP, formerly a majority-owned subsidiary of the Company, filed a voluntary petition for liquidation under Chapter 7 of the U.S. Bankruptcy Code. As a result of the filing, AVLP became subject to the control of the bankruptcy court, and the Company no longer maintained a controlling financial interest. Accordingly, the Company deconsolidated AVLP effective as of the petition date. In connection with the deconsolidation, the Company recognized a gain of $10.0 million, which is included in the consolidated statement of operations for the year ended December 31, 2025. The Company evaluated the criteria for discontinued operations and determined that the operations of AVLP did not meet the requirements for such classification.

Deconsolidation of Eco Pack Technologies Limited (“Eco Pack”)

On April 16, 2025, Eco Pack, formerly a majority-owned subsidiary of the Company, filed a voluntary liquidation under the insolvency regulations in the UK. As a result of the filing, the Company no longer maintained a controlling financial interest. Accordingly, the Company deconsolidated Eco Pack effective as of the filing date. In connection with the deconsolidation, the Company recognized a loss of $0.4 million, which is included in the consolidated statement of operations for the year ended December 31, 2025. The operations did not meet the criteria for discontinued operations.

Deconsolidation of a Subsidiary of ROI

During the year ended December 31, 2025, the Company recognized a gain of $2.7 million in connection with the bankruptcy proceedings for a subsidiary of ROI. The Company deconsolidated the entity upon determining that it no longer maintained a controlling financial interest. The gain recognized reflects the derecognition of the subsidiary’s remaining assets, liabilities, and equity balances. The operations did not meet the criteria for discontinued operations.

Gresham Chapter 11 Filing and Deconsolidation

On August 14, 2024, Gresham filed a voluntary petition for reorganization under Chapter 11 of the United States Bankruptcy Code. As a result of the Chapter 11 filing, Gresham and its subsidiaries became subject to the jurisdiction of the bankruptcy court and operated as debtors-in-possession.

Upon the filing of the Chapter 11 petition, the Company evaluated whether it continued to have a controlling financial interest in Gresham under ASC 810, Consolidation (“ASC 810”). Because the bankruptcy court and creditors obtained significant control over Gresham’s operations and financial decisions, the Company concluded that it no longer had a controlling financial interest in Gresham. Accordingly, the Company deconsolidated Gresham and its subsidiaries effective August 14, 2024, the petition date.

Upon deconsolidation, the Company recognized a gain on deconsolidation of approximately $2.0 million, which is included in net gain (loss) from discontinued operations in the consolidated statement of operations for the year ended December 31, 2024.

Discontinued Operations

The Company determined that the deconsolidation of Gresham represented a strategic shift that had a significant effect on the Company’s operations and financial results. Accordingly, in accordance with ASC 205-20, the historical results of Gresham have been presented as discontinued operations in the consolidated statements of operations and cash flows for periods prior to the reconsolidation date.

Net Loss from Discontinued Operations

The net loss from discontinued operations for the year ended December 31, 2024 includes the gain on deconsolidation as follows:

The following table presents the results of Gresham operations for the year ended December 31, 2024:

Cash Flows from Discontinued Operations

Cash flow activity related to discontinued operations is presented separately in the consolidated statement of cash flows and is summarized below:

Gresham Emergence from Chapter 11 and Reconsolidation

On August 29, 2025, the Bankruptcy Court confirmed Gresham’s First Amended Plan of Reorganization (the “Plan”). The Plan became effective on November 28, 2025 (the “Effective Date”), upon satisfaction of all conditions precedent.

Upon the Effective Date:

As a result of these transactions, the Company regained a controlling financial interest in Gresham and reconsolidated Gresham as of the Effective Date in accordance with ASC 810.

Because the Company had previously deconsolidated Gresham during the bankruptcy proceedings and regained control upon emergence, the transaction is accounted for as a business combination under ASC 805, Business Combinations.

Description of Acquired Businesses

Gresham operates through several subsidiaries, including Enertec Systems 2001 Ltd., Relec Electronics Ltd., and Microphase Corporation. These businesses are engaged in the design, manufacture, and distribution of electronic components and systems, primarily serving defense, aerospace, and industrial markets.

These businesses complement the Company’s broader strategic focus on advanced technologies and infrastructure.

Consideration Transferred

The total consideration transferred in the business combination was as follows:

The extinguishment of prepetition indebtedness was integral to the Plan and directly resulted in the Company obtaining ownership of the reorganized entity. Accordingly, it was included in consideration transferred. The fair value of the non-controlling interest was estimated using an income approach based on projected cash flows of the acquired business and a market participant discount rate. This measurement is classified as a Level 3 fair value measurement under ASC 820.

Preliminary Allocation of Purchase Price

The Company allocated the consideration transferred to the identifiable assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date. The allocation is preliminary and subject to refinement during the measurement period.

Goodwill primarily represents expected synergies from combining operations, expanded market opportunities, operational efficiencies, and the value of the assembled workforce, which does not qualify for separate recognition as an intangible asset. The goodwill recognized in connection with this acquisition is not expected to be deductible for income tax purposes.

Identifiable Intangible Assets

In connection with the acquisition, the Company identified the following intangible assets based on a preliminary third-party valuation:

Valuation of Identifiable Intangible Assets

The fair values of identifiable intangible assets were determined using income-based valuation techniques consistent with ASC 820. These techniques require significant estimates and assumptions, including projected revenues, customer attrition rates, royalty rates, operating margins, contributory asset charges, and discount rates. These measurements are classified as Level 3 fair value measurements.

Specifically:

The discount rates applied in these models were derived from weighted average cost of capital analyses for each reporting unit, which ranged from approximately 18% to 29%, and were adjusted, as appropriate, for asset-specific risk characteristics.

Measurement Period

The purchase price allocation is preliminary and subject to adjustment during the measurement period, which may extend up to one year from the acquisition date. The Company is continuing to evaluate certain estimates and assumptions, including the fair value of identifiable intangible assets and related useful lives, income tax balances, and working capital adjustments. Any measurement period adjustments will be recorded as an adjustment to goodwill.

Unaudited Pro Forma Financial Information

The following unaudited pro forma consolidated results of operations for the years ended December 31, 2025 and 2024 have been prepared as if the Gresham acquisition had occurred on January 1, 2024. This table has been prepared for comparative purposes only and is not indicative of the actual results that would have been attained had the acquisition occurred as of the beginning of the periods presented, nor is it indicative of future results.

4. CHANGE IN PLAN OF SALE OF AGREE HOTEL PROPERTIES

On April 30, 2024, the Company had a change in plan of sale for its four hotels owned and operated by AGREE. As a result, as of April 30, 2024, the assets no longer met the held for sale criteria and were required to be reclassified as held and used at the lower of adjusted carrying value or the fair value at the date of the not to sell.

In connection with this change in plan of sale, the Company recorded a loss on impairment of property and equipment related to the real estate assets of AGREE of $8.0 million during the year ended December 31, 2024. The fair values of property and equipment related to the real estate assets of AGREE were based on a discounted cash flow income approach for the hotel properties and a comparable sales market approach for the vacant land assets.

5. REVENUE DISAGGREGATION

The following tables summarize disaggregated customer contract revenues and the source of the revenue for the years ended December 31, 2025 and 2024. Revenues from lending and trading activities included in consolidated revenues were primarily interest, dividend and other investment income, which are not considered to be revenues from contracts with customers under GAAP. Revenue is presented by reportable segment. The “Holding Co.” column includes revenue that is not allocated to a specific reportable segment but is generated within the holding company entity. While not a separate reportable segment, Holding Co. is included in the table below to reconcile to total consolidated revenue.

The Company’s disaggregated revenues consisted of the following for the year ended December 31, 2025:

The Company’s disaggregated revenues consisted of the following for the year ended December 31, 2024:

6. FAIR VALUE OF FINANCIAL INSTRUMENTS

The following table sets forth the Company’s financial instruments that were measured at fair value on a recurring basis by level within the fair value hierarchy at December 31, 2025 (no material financial instruments were measured at fair value on a recurring basis at December 31, 2024):

The Company assesses the inputs used to measure fair value using the three-tier hierarchy based on the extent to which inputs used in measuring fair value are observable in the market. For investments where little or no public market exists, management’s determination of fair value is based on the best available information which may incorporate management’s own assumptions and involves a significant degree of judgment, taking into consideration various factors including earnings history, financial condition, recent sales prices of the issuer’s securities and liquidity risks.

The changes in Level 3 fair value hierarchy during the years ended December 31, 2025 and 2024 were as follows:

7. INVESTMENTS IN OTHER EQUITY SECURITIES

The Company holds non-marketable equity investments in privately held companies over which it does not have significant influence. For equity securities that do not have readily determinable fair values, the Company has elected the measurement alternative to measure such investments at cost, less impairment, if any, adjusted for observable price changes in orderly transactions for identical or similar investments of the same issuer.

Investments in other equity securities are included within other assets on the accompanying consolidated balance sheets. As of December 31, 2025 and 2024, the aggregate carrying value of these investments was approximately $4.1 million and $2.8 million, respectively. Included in the December 31, 2025 balance is an investment in Fintex Financial, Inc. of approximately $3.8 million, which is included within investments in other equity securities and not separately presented. The remaining balance, totaling approximately $0.3 million as of December 31, 2025, consists of various other investments accounted for under the measurement alternative.

The Company evaluates its equity investments without readily determinable fair values for impairment at each reporting period. If a qualitative assessment indicates that an investment is impaired, the Company recognizes an impairment loss equal to the difference between the investment’s carrying amount and its estimated fair value. Adjustments resulting from observable price changes and impairments are recorded in the consolidated statements of operations.

For the years ended December 31, 2025 and 2024, the Company recognized cumulative impairment charges of $0 and $8.6 million, respectively, related to equity securities without readily determinable fair values. Of the impairment recognized in 2024, approximately $6.3 million was recorded in other income (expense), and $2.3 million related to Fintech lending operations and was recorded as a reduction to revenue from lending and trading activities on the consolidated statements of operations and comprehensive loss.

8. CRYPTO ASSETS

The following table presents revenue from mined crypto assets for the years ended December 31, 2025 and 2024:

The following table presents the activities of the crypto assets (classified within prepaid expenses and other current assets) for the years ended December 31, 2025 and 2024:

The Company held approximately 525 and 2 Bitcoin at December 31, 2025 and December 31, 2024, respectively. The associated fair values and cost bases of Bitcoin held were $46.2 million and $53.8 million, respectively, at December 31, 2025 and $0.2 million and $0.1 million, respectively, at December 31, 2024.

9. INVENTORIES

At December 31, 2025 and 2024, inventories consisted of:

10. PROPERTY AND EQUIPMENT, NET

At December 31, 2025 and 2024, property and equipment consisted of:

Summary of depreciation expense:

Impairment of Property and Equipment

During the year ended December 31, 2025, the Company evaluated its investment in certain oil and gas properties operated by third parties for impairment. The Company identified indicators of impairment, including (i) significantly lower-than-expected production and revenue generated from the underlying wells operated by third parties, (ii) a history of operating results that did not support recovery of the carrying value of the assets, and (iii) the Company’s determination not to commit additional capital to third-party operators to further develop these properties. Based on these factors, the Company performed a recoverability test by comparing the carrying amount of the asset group to its estimated undiscounted future cash flows. The Company concluded that the carrying amount of the oil and gas properties was not recoverable, as the expected undiscounted future cash flows were not sufficient to recover the carrying value. The Company then estimated the fair value of the asset group. Due to limited production, the absence of active market transactions for similar underperforming assets, and the Company’s decision not to provide additional funding to third-party operators to support further development of the underlying properties, the estimated fair value of the investment was determined to be negligible. Accordingly, the Company recorded an impairment charge of approximately $3.0 million during the year ended December 31, 2025 to write down the carrying value of this investment to zero. The impairment loss is included in impairment of property and equipment in the accompanying consolidated statements of operations.

During the year ended December 31, 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 the Company’s miners to be less than their net carrying value during the year ended December 31, 2024, and an impairment charge of $10.5 million was recognized, decreasing the net carrying value of the Company’s crypto assets mining equipment to their estimated fair value. The Company valued the miners using an income approach utilizing a discounted cash flow and a discount rate of 20%. The Company estimated the cash flow from the miners over a two-year period assuming a utilization rate of 98%, a mining difficulty level of 101.6 trillion, a Bitcoin price of $76,000 and a power cost of $0.055 per kilowatt-hour. The estimated fair value of the Company’s miners is classified in Level 3 of the fair value hierarchy with no observable inputs using a discounted cash flow methodology.

On April 30, 2024, the Company had a change in plan of sale for our four hotels owned and operated by AGREE. As a result, as of April 30, 2024, the assets no longer met the held for sale criteria and were required to be reclassified as held and used at the lower of adjusted carrying value or the fair value at the date of the determination not to sell. In connection with this change in plan of sale, the Company recorded a loss on impairment of property and equipment related to the real estate assets of AGREE of $9.2 million during the year ended December 31, 2024. The fair values of property and equipment related to the real estate assets of AGREE were based on a discounted cash flow income approach for the hotel properties and a comparable sales market approach for the vacant land assets. Assumptions used in the discounted cash flow analysis included discount rates between 10.5% and 10.75%, terminal capitalization rates between 8.5% and 8.75% and occupancy rates between 59.2% and 78.8%.

Sale of St. Petersburg Property

On December 13, 2024, AGREE completed the sale of its real property located in St. Petersburg, Florida (the “Florida Property”) for $13.0 million and recorded a gain on the sale of $0.2 million included in gain on the sale of fixed assets in the consolidated statement of operations.

11. INTANGIBLE ASSETS, NET

At December 31, 2025 and 2024, intangible assets consisted of:

During the year ended December 31, 2025, the Company recognized approximately $11.9 million of identifiable intangible assets in connection with the reconsolidation of Gresham (see Note 4), primarily consisting of customer relationships, developed technology, and trade names.

All of the Company’s intangible assets are considered to have finite useful lives and are amortized on a straight-line basis over their estimated useful lives, which range from 5 to 15 years.

Summary of amortization expense:

As of December 31, 2025, intangible assets subject to amortization had an average remaining useful life of 11 years. The following table presents estimated amortization expense for each of the succeeding five calendar years and thereafter.

Impairment of Intangible Assets

During the year ended December 31, 2024, the Company recognized an impairment charge of approximately $1.5 million related to intangible assets associated with Eco Pack Technologies Limited. Based on internally developed forecasts of undiscounted expected future cash flows, the Company determined that the carrying value of these assets was not recoverable.

Valuation of Intangible Assets

Intangible assets acquired in business combinations, including those recognized in connection with the reconsolidation of Gresham, are recorded at fair value at the acquisition date. The Company primarily uses income-based valuation approaches to estimate fair value, including the multi-period excess earnings method and the relief-from-royalty method.

These valuation techniques require significant estimates and assumptions, including projected revenues, customer attrition rates, royalty rates, operating margins, contributory asset charges, and discount rates. Such measurements are classified as Level 3 fair value measurements within the fair value hierarchy.

12. INVESTMENTS – RELATED PARTIES

Investments in Alzamend Neuro, Inc. (“Alzamend”), Ault & Company, Inc. (“Ault & Company”) and Gresham at December 31, 2025 and 2024, were comprised of the following:

Investment in Promissory Notes, Related Parties – Ault & Company and Gresham

Amounts above are recorded in “Investment in promissory notes and other, related party” on the consolidated balance sheets.

Summary of interest income, related party, recorded within interest and other income on the consolidated statement of operations:

At each reporting date, the Company applies its judgment to evaluate the collectability of the note receivable and makes a provision based on the assessed amount of expected credit loss. This judgment is based on parameters such as interest rates, market conditions and creditworthiness of the creditor.

The Company determined that the collectability of certain notes receivables is doubtful based on information available.

Upon the deconsolidation of Gresham, the Company established an allowance for credit losses of $2.6 million related to notes receivable from Gresham included in net gain (loss) from discontinued operations. As of December 31, 2024, the Company performed an analysis of the allowance for credit losses of the Gresham notes receivable resulting in a $2.1 million reduction in the allowance, which was recorded within cost of revenue from lending and trading activities.

Investment in Alzamend Series B Convertible Preferred Stock, Warrants and Common Stock, Related Parties – Alzamend

Amounts above are recorded in “Investments in common stock and equity securities, related party” on the consolidated balance sheets.

The following tables summarize the changes in the Company’s investments in Alzamend common stock during the years ended December 31, 2025 and 2024:

Ault Lending Investment in Alzamend Series B Convertible Preferred Stock and Warrants

In connection with a securities purchase agreement entered into with Alzamend in January 2024, Ault Lending purchased 2,100 shares of Alzamend Series B convertible preferred stock and warrants to purchase 0.2 million shares of Alzamend common stock with a five-year term and an exercise price of $12.00 per share for a total purchase price of $2.1 million.

During the year ended December 31, 2025, Ault Lending converted its Alzamend Series B convertible preferred stock into Alzamend common stock. Following the conversion and related fair value adjustments, the carrying value of the investment was fully reduced from $2.1 million at December 31, 2024.

The Company elected to account for investment in other investments securities, related party, using a measurement alternative under which they were measured at cost and adjusted for observable price changes and impairments.

Messrs. Horne and Nisser are each paid $50,000 annually by Alzamend. Mr. Ault is paid $25,000 annually by Alzamend.

VIE Considerations for Ault Lending’s Investments in Alzamend

Alzamend is considered a VIE based on the Ault Lending’s investment in Alzamend common stock, Series B convertible preferred stock and warrants. However, Ault Lending is not deemed to be the primary beneficiary of Alzamend and therefore does not consolidate Alzamend in its financial statements. Ault Lending’s maximum exposure to loss as a result of its involvement with Alzamend is limited to the $15,000 carrying value of its investments.

13. WARRANTS

A summary of warrant activity for the years ended December 31, 2025 and 2024 is presented below.

The following table summarizes information about common stock warrants outstanding at December 31, 2025:

Warrant Issuances During 2025

During the year ended December 31, 2025, the Company issued warrants to purchase 0.2 million shares of Class A common stock at an exercise price of $5.92 per share, subject to adjustment, in connection with the issuance of Series G convertible preferred stock (the “Series G Preferred Stock”) to a related party (see Note 23).

Warrant Issuances During 2024

During the year ended December 31, 2024, the Company issued warrants to purchase 0.1 million shares of Class A common stock at an exercise price of $118.39 per share, subject to adjustment, in connection with the issuance of Series C convertible preferred stock (the “Series C Preferred Stock”) to a related party (see Note 23).

The Company utilized a variety of pricing models and the weighted average assumptions used during the years ended December 31, 2025 and 2024 were as follows:

14. ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Other current liabilities at December 31, 2025 and 2024 consisted of:

15. LEASES

The Company has operating leases for office space. The Company’s leases have remaining lease terms of 0.1 years to 8.0 years, some of which may include options to extend the leases perpetually, and some of which may include options to terminate the leases within one year.

The following table provides a summary of leases by balance sheet category as of December 31, 2025 and 2024:

The components of lease expenses for the years ended December 31, 2025 and 2024, were as follows:

The following tables provides a summary of other information related to leases for the years ended December 31, 2025 and 2024:

Maturity of lease liabilities under the Company’s non-cancellable operating leases as of December 31, 2025, were as follows:

16. DIVIDEND PAYABLE IN TURNONGREEN COMMON STOCK

In March 2024, the Company, in connection with a planned distribution of its common stock holdings of TurnOnGreen, announced the distribution to its stockholders of 25.0 million shares of TurnOnGreen common stock and warrants to purchase 25.0 million shares of TurnOnGreen common stock, which resulted in an adjustment to additional paid in capital and increase to non-controlling interest of $4.9 million based on the recorded value of the Company’s holdings in TurnOnGreen at the record date of the distribution.

17. ROI Transfers of White River Common Stock

In January 2024, ROI announced that it had concluded that, for regulatory reasons, ROI would be unable to effect the distribution of its shares of common stock of White River as contemplated by a registration statement previously filed by White River.

During the year ended December 31, 2024, ROI transferred 12.0 million shares of White River common stock with a fair value of $19.2 million at the date of transfer to certain of its accredited investors to resolve the matters discussed above.

In conjunction with the transfers to non-controlling interests, ROI converted a portion of its White River Series A convertible preferred stock into common stock and recorded a non-cash $17.9 million gain on conversion.

18. REDEEMABLE NON-CONTROLLING INTERESTS IN EQUITY OF SUBSIDIARY LIABILITY

The Company previously recorded a redeemable non-controlling interest in the equity of its subsidiary, Ault Disruptive, to reflect the redeemable nature of its public shares. All such interests were redeemed during the year ended December 31, 2024, and no redeemable non-controlling interests remained outstanding as of December 31, 2024 or 2025.

Redemption of Shares

On September 27, 2024, Ault Disruptive announced that it would 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 year ended December 31, 2024, shares of Ault Disruptive common stock were redeemed for an aggregate redemption amount of $2.3 million.

The following table summarizes the changes in the Company’s redeemable non-controlling interests in equity of subsidiaries during the year ended December 31, 2024:

19. NOTES PAYABLE

Notes payable at December 31, 2025 and 2024, were comprised of the following:

Amendment to AGREE Secured Construction Loans

The AGREE secured construction loans with an original due date of January 1, 2025, were amended on February 2, 2025, whereby AGREE agreed to pay monthly installments of interest only based on an annualized interest rate of Term SOFR plus 4.75%. In addition, AGREE agreed to make principal payments of $1.0 million in June 2025 and $2.0 million in September 2025 and December 2025 with the balance due March 1, 2026. AGREE has failed to make timely interest payments per the amended payment terms.

Gain on Extinguishment of ROI Note Payable

During the year ended December 31, 2025, the Company recognized a gain on extinguishment of debt of $1.1 million related to the pay-off of an ROI note payable.

Notes Payable Maturities

Principal maturities of the Company’s notes payable, assuming the exercise of all extensions that are exercisable solely at the Company’s option, as of December 31, 2025 were:

Interest Expense

Interest expense includes amounts incurred on notes payable, convertible notes payable, and notes payable to related parties. The components of interest expense for the years ended December 31, 2025 and 2024 were as follows:

20. NOTES PAYABLE, RELATED PARTY

Notes payable, related party at December 31, 2025 and 2024, were comprised of the following:

Summary of interest expense, related party, recorded within interest expense on the consolidated statement of operations:

Ault & Company Demand Note

On September 9, 2025, the Company executed a Demand Promissory Note (the “Note”) in favor of Ault & Company to formalize prior advances and loans previously provided by Ault & Company. The Note has an original principal balance of $4.0 million, bears interest at 9.5% per annum, and is payable upon demand. The Note is unsecured.

21. CONVERTIBLE NOTES PAYABLE

Convertible notes payable at December 31, 2025 and 2024, were comprised of the following:

Convertible Promissory Notes – Settled During 2025

During the year ended December 31, 2025, the Company had several convertible promissory notes outstanding, including notes issued in prior periods as well as new notes issued during 2025 in connection with exchange transactions, forbearance arrangements and other financing activities.

Aggregate principal and accrued interest under these notes were either (i) converted into shares of the Company’s Class A common stock or (ii) repaid in cash during 2025. In total, approximately $16.5 million of principal and accrued interest was converted into approximately 10.0 million shares of Class A common stock, and approximately $3.5 million was repaid in cash. As of December 31, 2025, no amounts remained outstanding under these notes.

SJC Convertible Promissory Note

On March 21, 2025, the Company entered into an exchange agreement with an institutional investor, pursuant to which the Company issued to the investor a convertible promissory note in the principal face amount of $4.9 million (the “Exchange Note”) in exchange for the cancellation of (i) a term note issued by the Company on January 14, 2025, with outstanding principal and accrued but unpaid interest of $2.6 million, (ii) a promissory note issued by the Company on March 7, 2025, with outstanding principal and accrued but unpaid interest of $0.5 million, (iii) a promissory note issued by the Company on March 12, 2025, with outstanding principal and accrued but unpaid interest of $1.5 million, and (iv) a promissory note issued by the Company on March 13, 2025, with outstanding principal and accrued but unpaid interest of $0.3 million. The Exchange Note accrues interest at the rate of 15% per annum. The Exchange Note was to mature on December 31, 2025. In January 2026, the Company and the investor entered into an amendment to the Exchange Note, pursuant to which the maturity date of the Exchange Note was extended until June 30, 2026.

The Exchange Note is convertible into shares of Class A common stock at a conversion price equal to the greater of (i) the Floor Price and (ii) the lesser of 75% of the VWAP (as defined in the Exchange Note) of the Class A common stock during the five trading days immediately prior to (A) the date of issuance of the Exchange Note or (B) the date of conversion into shares of Class A common stock, but not greater than $10.00 per share.

During the year ended December 31, 2025, approximately $2.1 million of outstanding principal and $0.2 million of accrued interest under the Exchange Note were converted into 5.8 million shares of the Company’s Class A common stock.

JGB Convertible Promissory Notes

On December 2, 2025, the Company, together with its wholly owned subsidiaries Sentinum and Alliance Cloud Services, LLC (collectively, the “Guarantors”), entered into a Note Purchase Agreement with JGB Capital, LP, JGB Partners, LP and JGB Capital Offshore Ltd., with JGB Collateral, LLC acting as agent. Pursuant to the agreement, the Company issued secured convertible promissory notes in the aggregate principal face amount of $12.8 million, which includes an OID of $0.8 million, for gross proceeds of $12.0 million.

The notes accrue interest at 12.5% per annum, payable monthly in arrears, and mature on December 2, 2027. The notes are convertible into shares of the Company’s Class A common stock at a conversion price equal to the lesser of (i) $0.3235 per share and (ii) 85% of the lowest daily VWAP of the Class A common stock during the three trading days immediately preceding and including the conversion date, but not less than $0.30 per share (the “JGB Floor Price”), subject to customary adjustments.

Beginning 120 days after issuance, if the conversion price is below the JGB Floor Price as of the last trading day of a calendar month, the holders may require the Company to redeem up to $0.25 million of outstanding principal during the subsequent month. The Company may prepay the notes in full, but not in part, commencing on the first anniversary of issuance, subject to specified conditions.

The notes are secured by, among other things, a second priority mortgage on certain real property owned by Alliance Cloud Services, LLC and Bitcoin collateral with a required U.S. dollar value of approximately $16.0 million to be held in a controlled crypto asset account. The Company has agreed to file a registration statement covering the resale of the shares issuable upon conversion of the notes, which registration statement was filed in December 2025.

Embedded Derivatives

The Company identified embedded derivative features within certain convertible promissory notes issued or outstanding during the year ended December 31, 2025 that required bifurcation and separate accounting as derivative liabilities under Accounting Standards Codification (“ASC”) 815, Derivatives and Hedging. These features primarily relate to conversion options with variable pricing mechanisms.

The fair value of the embedded derivative liabilities was estimated using a Monte Carlo simulation model. The model incorporates key assumptions including the Company’s stock price, risk-free interest rate, expected volatility, credit-risk adjusted discount rate, and the specific terms of each conversion feature (including floor price, cap, and VWAP-based pricing). Due to the significant use of unobservable inputs, these derivative liabilities are classified within Level 3 of the fair value hierarchy. See Note 7 for additional information, including the initial recognition and rollforward of embedded derivative liabilities during the year.

The following table summarizes the key inputs used in the valuation of the embedded derivatives at inception:

The Monte Carlo simulation utilized 100,000 iterations and incorporated conversion mechanics, including the floor price and the VWAP-based conversion price as defined in each agreement. The incremental value attributable to the conversion feature was isolated to determine its impact on the overall fair value of the embedded option.

Conversions of Convertible Notes

During the year ended December 31, 2025, principal, accrued and unpaid interest of $22.0 million was converted into 15.8 million shares of Class A common stock of the Company.

Gain (Loss) on Extinguishment of Convertible Notes

During the year ended December 31, 2025, the Company recognized a total net loss on extinguishment of convertible notes of $4.6 million. This amount includes:

Contractual Maturities

Principal maturities of the Company’s convertible notes payable, assuming the exercise of all extensions that are exercisable solely at the Company’s option, as of December 31, 2025, were:

22. COMMITMENTS AND CONTINGENCIES

Related Party Commitments

During the year ended December 31, 2025, the Company’s subsidiaries, BitNile.com, Inc. and askROI, Inc., entered into marketing and promotional commitments with a subsidiary of Ault & Company. The commitments, which totaled approximately $9.2 million, related to the coordination and execution of media placements, promotional events, and related marketing services in connection with various contracted events. These services were billed on a pass-through basis, at cost, without any mark-up or commission. The full $9.2 million was expensed during the year ended December 31, 2025.

Contingencies

Litigation Matters

The Company is involved in litigation arising from other matters in the ordinary course of business. The Company is regularly subject to claims, suits, regulatory and government investigations, and other proceedings involving labor and employment, commercial disputes, and other matters. Such claims, suits, regulatory and government investigations, and other proceedings could result in fines, civil penalties, or other adverse consequences.

Certain of these outstanding matters include speculative, substantial or indeterminate monetary amounts. The Company records a liability when it believes that it is probable that a loss has been incurred and the amount can be reasonably estimated. If the Company determines that a loss is reasonably possible and the loss or range of loss can be estimated, the Company discloses the reasonably possible loss. The Company evaluates developments in its legal matters that could affect the amount of liability that has been previously accrued, and the matters and related reasonably possible losses disclosed, and makes adjustments as appropriate. Significant judgment is required to determine both likelihood of there being a loss and the estimated amount of a loss related to such matters.

Arena Investors, LP (ROI Litigation)

On May 30, 2024, Arena Investors LP (“Arena”), in its capacity as collateral agent for five noteholders, filed a filed a Complaint (the “Complaint”) in the Supreme Court of the State of New York, County of New York against the Company and ROI, in an action captionedArena Investors LP v. Ault Alliance, Inc. and RiskOn International, Inc., Index No. 652792/2024.

The Complaint asserts a cause of action for breach of contract against the Company based on a Guaranty, dated April 27, 2023, and entered into, amongst others, the Company and Arena, and seeks damages in an amount in excess of $3,750,000, plus interest, attorneys’ fees, costs, expenses, and disbursements.

The Complaint also asserts a cause of action for breach of contract against ROI based on an alleged breach of that certain Security Agreement, dated April 27, 2023, and entered into among ROI and Arena. In connection with this cause of action, Arena seeks, among other things, costs and expenses from the Company and ROI.

On July 31, 2024, the Company and ROI filed a motion to dismiss (the “Motion”) seeking to partially dismiss the Complaint, as against the Company, and to dismiss the Compliant, in its entirety, as against ROI.

On or about January 21, 2025, the Court entered an Order denying the part of the Motion which sought partial dismissal of the Complaint, as against Company, and granting the part of the Motion which sought dismissal of the Complaint, in its entirety, as against ROI.

On February 18, 2025, the Company filed an Answer to the Complaint and asserted numerous affirmative defenses.

On or about July 29, 2025, the Court entered an Order (the “Consolidation and Dismissal Order”) consolidating this action with that certain action captionedArena Investors, LP v. Milton C. Ault III and Kristine Ault, Index No. 655857/2024, pending in the Supreme Court of the State of New York, County of New York (the “Second Filed Action”). In the Consolidation and Dismissal Order, the Court also dismissed Arena’s claims in the Second Filed Action, which arise from an alleged failure to pay a redemption premium as set forth in that certain Event of Default Redemption Notice, dated November 5, 2024, that Arena transmitted to, among others, the Company.

On or about September 11, 2025, Arena filed a notice of appeal in connection with the Consolidation and Dismissal Order.

On or about September 17, 2025, Arena formally commenced such appeal (the “Appeal”).

On or about October 3, 2025, the Company and Arena executed various settlement documents pursuant to which the Company agreed to resolve the matter through aggregate cash payments totaling $5.2 million. The Company made all required payments in accordance with the settlement terms.

On or about February 17, 2026, the Company filed a Stipulation of Discontinuance with Prejudice, thereby formally discontinuing the action.

On or about February 23, 2026, Arena filed a Notice of Withdrawal of the Appeal.

Other Litigation Matters

With respect to the Company’s other outstanding matters, based on the Company’s current knowledge, the Company believes that the amount or range of reasonably possible loss will not, either individually or in aggregate, have a material adverse effect on the Company’s business, consolidated financial position, results of operations, or cash flows. However, the outcome of such matters is inherently unpredictable and subject to significant uncertainties.

The Company had accrued loss contingencies related to litigation matters of $1.1 million and $2.3 million as of December 31, 2025 and 2024, respectively.

23. STOCKHOLDERS’ EQUITY

Class A Common Stock

Class A common stock confers upon the holders the rights to receive notice to participate and vote at any meeting of stockholders of the Company, to receive dividends, if and when declared, and to participate in a distribution of surplus of assets upon liquidation of the Company.

On August 29, 2025, the Company entered into a sales agreement with Wilson-Davis & Co., Inc. to sell shares of the Company’s class A common stock, having an aggregate offering price of up to $125 million from time to time, through an ATM offering program. Between August 29, 2025 and December 31, 2025, the Company received gross proceeds of $125 million through the sale of 255.5 million shares of the Company’s class A common stock through the ATM offering.

On December 19, 2025, the Company entered into a new ATM sales agreement providing for the sale of up to $50.0 million of additional shares of Class A common stock under its effective shelf registration statement. No shares were issued under this agreement as of December 31, 2025.

Class B Common Stock

The Class B common stock is identical to the Class A common stock, with the exception that each share thereof carries 10 times the voting power of a share of Class A common stock. The Class B common stock is convertible at any time into Class A common stock on a one-for-one basis at the option of the holder of the Class B common stock.

On October 31, 2025, the Company completed a special dividend of 19.9 million shares of Class B common stock to holders of Class A common stock, Class B common stock as well as Series B Convertible Preferred Stock, Series C Convertible Preferred Stock, Series G Convertible Preferred Stock and Series H Convertible Preferred Stock on an as-converted basis. The record date for the dividend was October 6, 2025.

During 2025,543,221 shares of Class B common stock were converted into 543,221 shares of Class A common stock on aone-for-one basis pursuant to the conversion provisions applicable to the Class B common stock.

Preferred Stock

Preferred stock as of December 31, 2025 consisted of the following:

Preferred stock as of December 31, 2024 consisted of the following:

The Company is authorized to issue 25.0 million shares of preferred stock, $0.001 par value. As of December 31, 2025, the rights, preferences, privileges and restrictions on the remaining authorized 18.2 million shares of preferred stock have not been determined. The Board is authorized to designate a new series of preferred shares and determine the number of shares, as well as the rights, preferences, privileges and restrictions granted to or imposed upon any series of preferred shares.

Series B Convertible Preferred Stock

On March 31, 2025, the Company entered into a securities purchase agreement with an institutional investor pursuant to which the Company agreed to sell up to 50,000 shares of Series B Convertible Preferred Stock (“Series B Preferred Stock”) for a total purchase price of up to $50.0 million. The securities purchase agreement provides that the transaction shall be conducted through 49 separate tranche closings; however, the investor may, at its sole discretion, purchase additional shares of Series B Preferred Stock prior to the scheduled closings.

During the year ended December 31, 2025, the Company issued an aggregate of 32,414 shares of Series B Preferred Stock for gross proceeds of approximately $32.4 million. In addition, approximately 92 shares of Series B Preferred Stock were issued as paid-in-kind (“PIK”) dividends pursuant to the terms of the Series B Preferred Stock. In the same period, the investor converted approximately 29,506 shares of Series B Preferred Stock, including PIK shares, into shares of Class A common stock.

Each share of Series B Preferred Stock has a stated value of $1,000 and is convertible into shares of Class A common stock. On April 23, 2025, the Company filed a Certificate of Amendment to the Certificate of Designation of Preferences, Rights and Limitations of the Series B Convertible Preferred Stock. This amendment, approved by the Board of Directors on April 22, 2025, revised the definition of “Conversion Price”, which is now the greater of (i) $0.40 and (ii) 75% of the Company’s lowest VWAP during the five trading days immediately preceding conversion, subject to a maximum of $10.00 per share. The holders are entitled to cumulative dividends at a 15% annual rate, payable monthly in arrears, and for the first two years, the Company may elect to pay such dividends in additional shares of Series B Preferred Stock in lieu of cash.

Termination of Equity Purchase Agreement

On May 28, 2025, the Company and Orion Equity Partners, LLC (“Orion”) mutually agreed to terminate the Purchase Agreement originally entered into on June 24, 2024, as subsequently amended (the “Purchase Agreement”). The Purchase Agreement provided the Company with the right, subject to certain terms and conditions, to sell up to $25.0 million of its 13.00% Series D Cumulative Redeemable Perpetual Preferred Stock (the “Series D Preferred Stock”) to Orion over a 36-month period. Prior to termination, the Company issued an aggregate of 0.3 million shares of Series D Preferred Stock pursuant to the Purchase Agreement in exchange for the cancellation of certain outstanding notes payable and related obligations totaling approximately $3.5 million. No further shares will be issued under the Purchase Agreement following its termination.

Sales of Series G Preferred Stock and Warrants to Ault & Company (Related Party)

On December 21, 2024, the Company entered into a securities purchase agreement (the “December 2024 SPA”) with Ault & Company, pursuant to which it agreed to sell, in one or more closings, to Ault & Company up to 25,000 shares of Series G convertible preferred stock (“Series G Preferred Stock”) and warrants to purchase up to 4.2 million shares of Class A common stock (the “Series G Warrants”) for a total purchase price of up to $25.0 million. The December 2024 SPA provides that the financing may be conducted through one or more closings. During the year ended December 31, 2025, the Company sold to Ault & Company an aggregate of 960 shares of Series G Convertible Preferred Stock and warrants to purchase an aggregate of 0.2 million shares of Class A common stock, for an aggregate purchase price of $1.0 million.

Each share of Series G Preferred Stock has a stated value of $1,000.00 and is convertible into shares of Class A common stock at a conversion price equal to the greater of (i) $0.10 per share and (ii) the lesser of (A) $6.74 or (B) 105% of the volume weighted average price of the Class A common stock during the ten trading days immediately prior to the date of conversion. The conversion price is subject to adjustment in the event of an issuance of Class A common stock at a price per share lower than the conversion price then in effect, as well as upon customary stock splits, stock dividends, combinations or similar events. The holders of Series G Preferred Stock are entitled to cumulative cash dividends at an annual rate of 9.5%, or $95.00 per share, based on the stated value per share. Dividends shall accrue for 10 years from the date of issuance of such shares of Series G Preferred Stock and are payable monthly in arrears. For the first two years, the Company may elect to pay the dividend amount in shares of Class A common stock rather than cash. The holders of the Series G Preferred Stock are entitled to vote with the Class A common stock as a single class on an as-converted basis.

Series H Convertible Preferred Stock Securities Purchase Agreement with Ault & Company(Related Party)

On July 31, 2025, the Company entered into a securities purchase agreement (the “July 2025 SPA”) with Ault & Company, pursuant to which it agreed to sell, in one or more closings, to Ault & Company up to 100,000 shares of Series H convertible preferred stock (“Series H Preferred Stock”) for a total purchase price of up to $100.0 million. The July 2025 SPA provides that the financing may be conducted through one or more closings. During the year ended December 31, 2025, the Company sold to Ault & Company 4,000 shares of Series H Preferred Stock for an aggregate purchase price of $4.0 million.

Each share of Series H Preferred Stock has a stated value of $1,000.00 and is convertible into shares of Class A common stock at a conversion price equal to the greater of (i) $0.10 per share and (ii) the lesser of (A) $0.79645 or (B) 105% of the volume weighted average price of the Class A common stock during the five trading days immediately prior to the date of conversion. The conversion price is subject to adjustment in the event of an issuance of Class A common stock at a price per share lower than the conversion price then in effect, as well as upon customary stock splits, stock dividends, combinations or similar events. The holders of Series H Preferred Stock are entitled to cumulative cash dividends at an annual rate of 9.5%, or $95.00 per share, based on the stated value per share. Dividends shall accrue for 10 years from the date of issuance of such shares of Series H Preferred Stock and are payable monthly in arrears. For the first two years, the Company may elect to pay the dividend amount in shares of Class A common stock rather than cash. The holders of the Series H Preferred Stock are entitled to vote with the Class A common stock as a single class on an as-converted basis.

Conversions of Convertible Notes

During the year ended December 31, 2025, the Company issued 15.8 million shares of Class A common stock upon conversion of convertible promissory notes payable (see Note 21).

2025 Stock Incentive Plan and Option Grants

On July 31, 2025, the Board of Directors approved grants of 7.25 million non-qualified stock options to purchase shares of Class A common stock for the Company’s directors and executive officers. The grants were issued on August 12, 2025, at an exercise price of $0.72 per share. These grants are made outside of the 2025 Stock Incentive Plan and are subject to stockholder approval.

On July 31, 2025, the Board also approved the Company’s 2025 Stock Incentive Plan, which authorizes the issuance of up to 8.0 million shares, and approved grants of options under the plan covering an aggregate of 6.2 million shares to employees at an exercise price of $0.72 per share.

Vesting for all 13.45 million grants is 50% upon stockholder and exchange approval and 50% in equal monthly installments over 24 months beginning January 1, 2026.

During the fourth quarter of 2025, stockholder approval of the 2025 Plan was obtained. As a result, the Company recognized stock-based compensation expense of $0.5 million related to option grants to employees (other than executive officers and directors) in accordance with ASC 718, based on the grant-date fair value of the awards and the applicable service period.

The option grants to directors and executive officers remain subject to stockholder and exchange approval and, accordingly, are not considered granted for accounting purposes as of December 31, 2025. No stock-based compensation expense has been recognized for those awards as of such date.

Settlement of subsidiary financing obligation with non-controlling interests

During the year ended December 31, 2025, the Company entered into a settlement agreement related to prior financing arrangements of a subsidiary. As a result of the settlement, the Company was relieved of its obligation to issue certain commitment shares previously recorded as an accrued liability of $2.6 million. Because the original obligation was recognized as an equity transaction with non-controlling interests, the reversal of the liability was recorded as an adjustment to non-controlling interests within stockholders’ equity.

24. INCOME TAXES

The following is a geographical breakdown of income/loss from continuing operations before the provision for income tax, for the years ended December 31, 2025 and 2024:

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and income tax purposes. Significant components of the Company’s deferred tax assets for the years ended December 31, 2025 and 2024 were as follows:

At December 31, 2025, the Company had federal net operating loss carryforwards (“NOLs”) for income tax purposes of approximately $300.8 million related to the years after December 31, 2017 that do not have an expiration under current tax law and $8.1 million related to the years before January 1, 2018 subject to expiration after application of limitation set forth in Section 382 of the Internal Revenue Code (“§382”). The Company had state NOLs for income tax purposes of approximately $342.2 million as of December 31, 2025. The state NOLs may be used to offset future taxable income and will begin to expire in 2029, unless previously utilized. In accordance with §382, future utilization of the Company’s NOLs is subject to an annual limitation as a result of ownership changes that occurred previously. The Company also has foreign net operating loss carryovers of approximately $3.2 million which may be carried forward indefinitely.

In assessing the realization of deferred tax assets, management considers whether it is more likely than not some portion or all deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporary differences representing net future deductible amounts become deductible. Management considers the scheduled reversal of deferred tax assets, projected future taxable income and tax planning strategies in making this assessment. After consideration of all positive and negative evidence, including the Company’s generation of NOLs in current and prior periods, there is substantial doubt regarding the Company’s ability to utilize its deferred tax assets, therefore, the Company recorded a full valuation allowance. For the year ended December 31, 2025, the valuation allowance increased by $24.7 million.

The net income tax provision on continuing operations for the years ended December 31, 2025 and 2024 consisted of the following:

A reconciliation of the provision for income taxes to the amount computed by applying the 21% statutory U.S. federal income tax rate to income before income taxes after the adoption of ASU 2023-09 is as follows:

A reconciliation of the provision for income taxes to the amount computed by applying the 21% statutory U.S. federal income tax rate to income before income taxes for years prior to the adoption of ASU 2023-09 is as follows:

The amounts of cash income taxes paid by the Company were as follows:

The Company accounts for uncertain tax positions in accordance with ASC 740-10-25. ASC 740-10-25 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under ASC 740-10-25, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefit to be recognized is measured as the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. To the extent that the final tax outcome of these matters is different than the amount recorded, such differences impact income tax expense in the period in which such determination is made. Interest and penalties, if any, related to accrued liabilities for potential tax assessments are included in income tax expense. ASC 740-10-25 also requires management to evaluate tax positions taken by the Company and recognize a liability if the Company has taken uncertain tax positions that more likely than not would not be sustained upon examination by applicable taxing authorities. Management of the Company has evaluated tax positions taken by the Company and has concluded that as of December 31, 2025 and 2024, there are no uncertain tax positions taken, or expected to be taken, that would require recognition of a liability that would require disclosure in the financial statements.

In general, the Company’s statute of limitations remains open for various taxable years, in various U.S. federal, U.S. state and foreign jurisdictions. However, if and when the Company claims net operating loss carryforwards against future taxable income, those losses may be examined by taxing authorities. The Company will perform an analysis to determine the effect, if any, of these loss limitations rules on the NOL carryforward balances. Earnings in all foreign jurisdictions are permanently reinvested.

The Organization for Economic Co-operation and Development (“OECD”) has introduced a framework to implement a global minimum corporate tax of 15%, referred to as Pillar Two. Many aspects of Pillar Two were effective beginning in calendar year 2024 and other aspects became effective beginning in calendar year 2025. While it is uncertain whether the U.S. will adopt Pillar Two, certain countries in which the Company operates have adopted legislation and other countries are in the process of introducing legislation to implement Pillar Two. While the Company does not expect Pillar Two to have a material impact on its effective tax rate, the Company’s analysis is ongoing as the OECD releases additional guidance and countries implement additional legislation.

The One Big Beautiful Bill Act (“OBBB Act”) was enacted on July 4, 2025, in the United States. The OBBB Act included several significant provisions, including re-establishing a 100% bonus depreciation deduction, re-establishing rules in calculating business interest expense limitations pursuant to Internal Revenue Code §163(j), changing the calculation of international tax inclusions, and removing the capitalization requirements for domestic research or experimental expenditures paid or incurred in tax years beginning after December 31, 2024. Management has considered applicable tax impacts of the OBBB Act within the 2025 financial statements.

25. NET LOSS PER SHARE

Net loss per share is computed by dividing the net loss to common stockholders by the weighted average number of Class A and Class B common shares outstanding. The calculation of the basic and diluted earnings per share is the same for all periods presented as the effect of the potential common stock equivalents is anti-dilutive due to the Company’s net loss position for all periods presented. Anti-dilutive securities, which are convertible into or exercisable for the Company’s Class A common stock, consisted of the following at December 31, 2025 and 2024:

26. SEGMENT AND CUSTOMERS INFORMATION

The Company had the following reportable segments as of December 31, 2025 and 2024; see Note 1 for a brief description of the Company’s business. The Company’s Chief Operating Decision Maker (“CODM”) is its Executive Chairman, Mr. Ault. The performance measure of the Company’s reportable segments is primarily income or (loss) from operations. Income or (loss) from operations for each segment includes all revenues, cost of revenues, gross profit and other operating expenses directly attributable to the segment. The CODM is also provided with key non-cash expenses by segment, including depreciation and amortization, impairment of property and equipment and impairment of goodwill and intangible assets. These financial metrics are used for evaluating the performance of each segment and making decisions about allocating capital and other resources to each segment. The “Holding Co.” column includes financial results that are not allocated to a specific reportable segment but are primarily generated within the holding company entity. The following data presents the revenues, expenditures and other operating data of the Company and its operating segments for the year ended December 31, 2025:

Segment information for the year ended December 31, 2024:

27. CONCENTRATIONS OF CREDIT AND REVENUE RISK

Significant customers are those that represent more than 10% of the Company’s total revenue or accounts receivable balances for the periods and as of each balance sheet date presented. For each significant customer, revenue as a percentage of total revenue and gross accounts receivable as a percentage of total gross accounts receivable as of the periods presented were as follows:

28. SUBSEQUENT EVENTS

Class A Common Stock ATM Offering Activity

During the period between January 1, 2026 through April 12, 2026, the Company sold an aggregate of 91.6 million shares of Class A common stock pursuant to an ATM offering for gross proceeds of $18.1 million.

Series D Preferred ATM Offering Activity

During the period between January 1, 2026 through April 12, 2026, the Company issued an aggregate of 2,909 shares of Series D Preferred Stock pursuant to its Series D ATM offering for gross proceeds of $65,000.

Second Amendment to AGREE Construction Loans

In January 2026, the Company’s AGREE subsidiary amended the terms of its construction loans related to the AGREE properties. The amendment extended the maturity dates of the loans to January 1, 2027, subject to a potential one-year extension to January 1, 2028 upon satisfaction of certain conditions. The agreement also modifies the interest rate to Term SOFR plus 5.75%, with required monthly interest payments based on Term SOFR plus 4.75%, with the difference accruing and payable at maturity or earlier repayment. On April 1, 2026, the borrowers were required to make a principal payment of $3.0 million followed by monthly principal payments of $1.0 million through maturity. As of the date of this filing, the borrowers have not made the required principal payments. While such non-payment constitutes an event of default under the loan agreements, the lenders have not provided a notice of default. The modification also requires the borrowers to fund interest reserves totaling approximately $2.0 million and provides temporary waivers of certain financial covenants through the scheduled maturity date. In connection with the modification, the borrowers paid an extension fee of approximately $0.3 million.

Circle 8 Financing

In March 2026, Circle 8 entered into a secured promissory note in the principal amount of $1.5 million for the purchase of a crane. The secured promissory note accrues interest at 5.9% per annum and will mature in March 2031.

Term Notes

In January and February 2026, the Company issued two short-term term notes to an institutional investor for aggregate gross proceeds of $10.0 million. The notes were originally scheduled to mature in March and April 2026, respectively, and require periodic principal repayments prior to maturity. The Company amended the note that matured in March 2026 to extend its maturity date to April 7, 2026. In connection with the extension, the Company agreed to pay an extension fee of approximately $0.1 million, which was added to the outstanding principal balance. The note has been repaid in full.

Receipt of Litigation-Related Proceeds

In March 2026 and on April 1, 2026, the Company received aggregate cash proceeds of approximately $26.6 million in connection with the resolution of litigation involving a former subsidiary. The Company is currently evaluating the appropriate accounting and treatment of these proceeds, including the extent to which amounts may be retained, distributed, or otherwise allocated.