What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2023-04-14 compared with 2023-04-14 · 294 added, 883 removed, 794 unchanged (60% of the section changed)

10 unchanged sentences

Accrued revenue

Investment in promissory notes and other, related parties

Prepaid expenses and other current assets

4 unchanged sentences

Right-of-use assets

Investment in promissory notes and other, related parties

Investments in common stock, related parties

Investments in other equity securities

Investments in equity securities

Investment in unconsolidated entity

8 unchanged sentences

Notes payable, net

Convertible notes payable, current

TOTAL CURRENT LIABILITIES

The accompanying notes are an integral part of

these unaudited condensed consolidated financial statements.

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

AULT ALLIANCE, INC.

12 unchanged sentences

$ 0.001 par value – 1,000,000 shares authorized;

issued and outstanding at June 30, 2022 and December 31, 2021

issued and outstanding at March 31, 2022 and December 31, 2021

(redemption amount and liquidation preference of $ 176,000 as of

June 30, 2022 and December 31, 2021)

March 31, 2022 and December 31, 2021)

Series B Convertible Preferred Stock, $ 10 stated value per share,

1 unchanged sentence

125,000 shares issued

and outstanding at June 30, 2022 and December 31, 2021 (liquidation

preference of $ 1,250,000 at June 30, 2022 and December 31, 2021)

Series D Cumulative Redeemable Perpetual Preferred Stock, $ 25 stated

value per share, $ 0.001 par value – 2,000,000 shares authorized;

shares authorized, 146,618 shares and 0 shares issued and outstanding at

June 30, 2022 and December 31, 2021, respectively (liquidation preference of

$ 3,665,450 and $ 0 as of June 30, 2022 and December 31, 2021, respectively)

and outstanding at March 31, 2022 and December 31, 2021 (liquidation

preference of $ 1,250,000 at March 31, 2022 and December 31, 2021)

Class A Common Stock, $ 0.001 par value – 500,000,000 shares authorized;

324,440,579 and 84,344,607 shares issued and outstanding at June 30,

225,015,203 and 84,344,607 shares issued and outstanding at March 31,

2022 and December 31, 2021, respectively

Class B Common Stock, $ 0.001 par value – 25,000,000 shares authorized;

0 shares issued and outstanding at June 30, 2022 and December 31, 2021

nil 0 shares issued and outstanding at March 31, 2022 and December 31, 2021

Additional paid-in capital

3 unchanged sentences

Accumulated other comprehensive loss

( 1,863,000 )

Treasury stock, at cost

7 unchanged sentences

$ 490,286,000

The accompanying notes are an integral part of

these unaudited condensed consolidated financial statements.

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

AULT ALLIANCE, INC.

1 unchanged sentence

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

AND COMPREHENSIVE (LOSS) INCOME

AND COMPREHENSIVE LOSS

For the Three Months Ended

For the Six Months Ended

Revenue, cryptocurrency mining

Revenue, cryptocurrency mining, net

Revenue, hotel operations

8 unchanged sentences

Total operating expenses

(Loss) income from operations

( 23,719,000 )

( 22,689,000 )

Income from operations

Other income (expenses)

3 unchanged sentences

( 29,824,000 )

( 31,855,000 )

Change in fair value of marketable equity securities

( 1,915,000 )

Realized gain (loss) on marketable securities

Realized gain on marketable securities

Loss from investment in unconsolidated entity

1 unchanged sentence

Change in fair value of warrant liability

Total other expenses, net

( 2,149,000 )

( 7,079,000 )

( 31,966,000 )

Total other (expenses) income, net

( 29,817,000 )

1 unchanged sentence

( 28,787,000 )

( 54,655,000 )

Income tax (provision) benefit

( 3,504,000 )

( 3,510,000 )

Net (loss) income

( 28,787,000 )

Net loss (income) attributable to non-controlling interest

( 1,081,000 )

Net loss attributable to non-controlling interest

Net (loss) income attributable to Ault Alliance, Inc.

( 28,772,000 )

( 54,536,000 )

Preferred dividends

1 unchanged sentence

$ ( 28,777,000 )

$ ( 54,585,000 )

Basic net (loss) income per common share

5 unchanged sentences

$ ( 28,777,000 )

$ ( 54,585,000 )

Other comprehensive income (loss)

Foreign currency translation adjustment

( 1,471,000 )

( 1,758,000 )

Other comprehensive (loss) income

( 1,471,000 )

( 1,758,000 )

Total comprehensive (loss) income

$ ( 29,064,000 )

$ ( 56,343,000 )

The accompanying notes are an integral part of

these unaudited condensed consolidated financial statements.

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

AULT ALLIANCE, INC.

2 unchanged sentences

IN STOCKHOLDERS’ EQUITY

Three Months Ended June 30, 2022

Series A, B & D

Preferred Stock

Three Months Ended March 31, 2022

Comprehensive

Stockholders’

BALANCES, April 1, 2022

BALANCES, January 1, 2022

$ 385,644,000

4 unchanged sentences

Issuance of common stock for restricted stock awards

Preferred stock issued

Preferred stock offering costs

Stock-based compensation:

Sale of common stock

Financing cost in connection with sales of common stock

( 1,266,000 )

Acquisition of non-controlling interests

Restricted stock awards

Issuance of common stock for cash

Financing cost in connection with sales of common

( 2,758,000 )

Non-controlling interest from AVLP acquisition

Non-controlling interest from SMC acquisition

Purchase of treasury stock – Ault Alpha

1 unchanged sentence

( 28,772,000 )

( 25,764,000 )

Preferred dividends

Foreign currency translation adjustments

( 1,471,000 )

Net loss attributable to non-controlling interest

BALANCES, June 30, 2022

BALANCES, March 31, 2022

$ 495,536,000

3 unchanged sentences

$ 308,458,000

The accompanying notes are an integral part of

these unaudited condensed consolidated financial statements.

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

AULT ALLIANCE, INC.

2 unchanged sentences

IN STOCKHOLDERS’ EQUITY (RESTATED)

Three Months Ended June 30, 2021

Three Months Ended March 31, 2021

Preferred Stock

3 unchanged sentences

Income (Loss)

BALANCES, April 1, 2021

$ 292,763,000

$ ( 117,366,000 )

$ ( 878,000 )

$ 176,470,000

Stock-based compensation

Sale of common stock

Financing cost in connection with sales of common stock

Issuance of common stock for conversion

of convertible notes payable, related party

Comprehensive loss:

Preferred dividends

Foreign currency translation adjustments

Net income attributable to non-controlling interest

( 1,083,000 )

BALANCES, June 30, 2021

$ 311,760,000

$ ( 81,047,000 )

$ ( 744,000 )

$ 231,389,000

The accompanying notes are an integral part of

these unaudited condensed consolidated financial statements.

AULT ALLIANCE, INC.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES

IN STOCKHOLDERS’ EQUITY

Six Months Ended June 30, 2022

Series A, B & D

Preferred Stock

Comprehensive

Stockholders’

BALANCES, January 1, 2021

2 unchanged sentences

$ ( 785,000 )

$ ( 13,180,000 )

$ 228,455,000

Issuance of common stock for restricted stock awards

Preferred stock issued

Preferred stock offering costs

Stock based compensation:

Sale of common stock

Issuance of common stock for cash

Issuance of common stock for conversion

of convertible notes payable

Financing cost in connection with sales of common stock

1 unchanged sentence

( 4,065,000 )

Acquisition of non-controlling interests

( 1,848,000 )

( 2,230,000 )

Non-controlling interest from AVLP acquisition

Non-controlling interest from SMC acquisition

Purchase of treasury stock - Ault Alpha

( 7,459,000 )

( 54,536,000 )

Preferred dividends

Foreign currency translation adjustments

( 1,758,000 )

Net loss attributable to non-controlling interest

BALANCES, June 30, 2022

$ 549,713,000

$ ( 200,184,000 )

$ ( 1,863,000 )

$ ( 20,639,000 )

$ 345,399,000

The accompanying notes are an integral part of

these unaudited condensed consolidated financial statements.

AULT ALLIANCE, INC.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES

IN STOCKHOLDERS’ EQUITY (RESTATED)

Six Months Ended June 30, 2021

Preferred Stock

Comprehensive

Stockholders’

Income (Loss)

BALANCES, January 1, 2021

$ 171,396,000

$ ( 122,329,000 )

$ ( 785,000 )

Stock-based compensation

Sale of common stock

Financing cost in connection with sales of

Issuance of common stock for conversion

of convertible notes payable

Issuance of common stock for conversion

of convertible notes payable, related party

Comprehensive loss:

2 unchanged sentences

Net income attributable to non-controlling interest

BALANCES, June 30, 2021

$ 311,760,000

BALANCES, March 31, 2021

$ 292,763,000

1 unchanged sentence

$ 176,470,000

The accompanying notes are an integral part of

these unaudited condensed consolidated financial statements.

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

AULT ALLIANCE, INC.

1 unchanged sentence

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Six Months Ended June 30,

For the Three Months Ended March 31,

Cash flows from operating activities:

2 unchanged sentences

Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities:

Depreciation and amortization

Amortization of right-of-use assets

Amortization, related party

Interest expense – debt discount

8 unchanged sentences

( 4,892,000 )

Unrealized gains on marketable securities

( 13,515,000 )

Unrealized losses (gains) on marketable securities

( 2,260,000 )

Unrealized losses (gains) on investments in equity securities, related parties

Unrealized (gains) losses on investments in equity securities, related parties

( 3,123,000 )

1 unchanged sentence

( 13,461,000 )

( 1,224,000 )

Loss from investment in unconsolidated entity

Loss on remeasurement of investment in unconsolidated entity

Changes in operating assets and liabilities:

2 unchanged sentences

Accounts receivable

( 2,311,000 )

Accrued revenue

1 unchanged sentence

Prepaid expenses and other current assets

( 2,537,000 )

Digital currencies

1 unchanged sentence

Accounts payable and accrued expenses

( 1,713,000 )

Other current liabilities

8 unchanged sentences

( 3,595,000 )

( 4,040,000 )

Investments in common stock and warrants, related parties

( 4,756,000 )

( 16,483,000 )

Investment in real property, related party

( 2,670,000 )

Proceeds from sale of investment in real property, related party

Purchase of SMC, net of cash received

( 8,239,000 )

Cash received upon acquisition of AVLP

Acquisition of non-controlling interests

( 2,230,000 )

Purchase of marketable equity securities

( 1,981,000 )

Sales of marketable equity securities

Investments in loans receivable

( 2,728,000 )

Principal payments on loans receivable

6 unchanged sentences

( 16,727,000 )

The accompanying notes are an integral part of

these unaudited condensed consolidated financial statements.

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

AULT ALLIANCE, INC.

1 unchanged sentence

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Six Months Ended June 30,

For the Three Months Ended March 31,

Cash flows from financing activities:

2 unchanged sentences

$ 124,983,000

Financing cost in connection with sales of common stock

Financing cost in connection with sales of equity securities

( 2,758,000 )

( 4,065,000 )

Proceeds from sales of preferred stock

Financing cost in connection with sales of preferred stock

Proceeds from notes payable

3 unchanged sentences

( 65,986,000 )

( 1,917,000 )

Payments of preferred dividends

Purchase of treasury stock

( 7,459,000 )

Payments on revolving credit facilities, net

9 unchanged sentences

Conversion of convertible notes payable into shares of common stock

Settlement of accounts payable with digital currency

Conversion of investment in unconsolidated entity for acquisition of AVLP

Payment of accounts payable with digital currency

Conversion of convertible notes payable, related party into shares of common stock

Conversion of debt and equity securities to marketable securities

Conversion of loans receivable to marketable securities

Conversion of interest receivable to marketable securities

Conversion of loans receivable to debt and equity securities

Recognition of new operating lease right-of-use assets and lease liabilities

The accompanying notes are an integral part of

these unaudited condensed consolidated financial statements.

Purchase of marketable equity securities for future payment

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

DESCRIPTION OF BUSINESS

6 unchanged sentences

at which it mines Bitcoin, and provides mission-critical products that support a diverse range of industries, including defense/aerospace,

industrial, automotive, medical/biopharma, karaoke audio equipment, hotel operations and textiles.

industrial, automotive, telecommunications, medical/biopharma, hotel operations and textiles.

In addition, the Company extends credit

7 unchanged sentences

investment and capital allocation decisions are made for the Company by Mr.

Ault and the other members of the Executive Committee.

Company has eight reportable segments:

Ault and the Executive Committee.

The Company has six reportable

· BitNile, Inc.

7 unchanged sentences

(“TurnOnGreen”) – commercial electronics solutions,

· The Singing Machine Company, Inc.

(“SMC”) – karaoke audio equipment;

· Avalanche International Corp.

(“Avalanche” or “AVLP”) – advanced textiles processing technology;

· Ault Global Real Estate Equities, Inc.

(“AGREE”) – hotel operations and other commercial

real estate holdings;

· Real Estate – hotel operations and other commercial real estate holdings, and

· Ault Disruptive Technologies Corporation (“Ault Disruptive”) – a special purpose acquisition

3 unchanged sentences

This Amendment amends the Quarterly Report on

Form 10-Q of the Company for the six months ended June 30, 2022, that was originally filed with the U.S.

Form 10-Q of the Company for the three months ended March 31, 2022, that was originally filed with the U.S.

Securities and Exchange Commission

on August 22, 2022.

on May 23, 2022.

This Amendment only corrects an error in classification with respect to changes in fair value of financial instruments

6 unchanged sentences

Further, this Amendment also includes certain limited modifications to reflect the correct

classification in disclosures in the Company’s Note 20 Net (Loss) Income per Share footnote in the Company’s Notes to Condensed

classification in disclosures in the Company’s Note 16 Net Income (Loss) per Share footnote in the Company’s Notes to Condensed

Consolidated Financial Statements.

3 unchanged sentences

of “ Change in fair value of equity securities, related party ” and “ Net

unrealized gain on derivative securities of related party ” were adjusted pursuant to the schedules

unrealized gain on derivative securities of related party ” were adjusted pursuant to the schedule

Schedule of condensed consolidated statements of operations and comprehensive loss

For the Three Months Ended

June 30, 2021

Revenue, cryptocurrency mining, net

Revenue, lending and trading activities

Total revenue

Cost of revenue

Operating expenses

Research and development

Selling and marketing

General and administrative

Total operating expenses

Income from operations

Other income (expenses)

Interest and other income

Change in fair value of equity securities, related party

( 5,893,000 )

Interest expense

Change in fair value of marketable equity securities

( 1,915,000 )

Gain on extinguishment of debt

Change in fair value of warrant liability

Total other expenses, net

( 1,186,000 )

( 5,893,000 )

( 7,079,000 )

Income (loss) before income taxes

( 5,893,000 )

Income tax provision

( 3,504,000 )

Net income (loss)

( 5,893,000 )

Net income attributable to non-controlling interest

Net income (loss) attributable to Ault Alliance, Inc.

( 5,893,000 )

Preferred dividends

Net income (loss) available to common stockholders

$ ( 5,893,000 )

Basic net income (loss) per common share

Diluted net income (loss) per common share

Weighted average basic common shares outstanding

Weighted average diluted common shares outstanding

Comprehensive income

Net income (loss) available to common stockholders

$ ( 5,893,000 )

Other comprehensive income (loss)

Foreign currency translation adjustment

Net unrealized gain on derivative securities of related party

( 5,893,000 )

Other comprehensive (loss) income

( 5,759,000 )

Total comprehensive income

For the Six Months Ended

June 30, 2021

March 31, 2021

Revenue, cryptocurrency mining, net

11 unchanged sentences

Change in fair value of equity securities, related party

( 2,924,000 )

Interest expense

1 unchanged sentence

Realized gain on marketable securities

Gain on extinguishment of debt

Gain (loss) on extinguishment of debt

Change in fair value of warrant liability

Total other (expenses) income, net

( 2,924,000 )

( 2,227,000 )

Income (loss) before income taxes

( 2,924,000 )

Income tax provision

( 3,510,000 )

Net income (loss)

(Loss) income before income taxes

Income tax (provision) benefit

Net (loss) income

Net loss (income) attributable to non-controlling interest

( 1,081,000 )

Net income attributable to non-controlling interest

Net income (loss) attributable to Ault Alliance, Inc.

( 1,081,000 )

Net (loss) income attributable to BitNile Holdings, Inc.

Preferred dividends

Net income (loss) available to common stockholders

$ ( 2,924,000 )

Basic net income (loss) per common share

Diluted net income (loss) per common share

Net (loss) income available to common stockholders

Basic net (loss) income per common share

Diluted net (loss) income per common share

Weighted average basic common shares outstanding

Weighted average diluted common shares outstanding

Comprehensive income

Net income (loss) available to common stockholders

$ ( 2,924,000 )

Comprehensive (loss) income

Net (loss) income available to common stockholders

Other comprehensive income (loss)

4 unchanged sentences

( 2,969,000 )

Total comprehensive income

Total comprehensive (loss) income

Condensed Consolidated Statements of Changes in Stockholders’ Equity amounts of “ Accumulated

1 unchanged sentence

were adjusted pursuant to the schedules below:

Schedule of condensed consolidated statements of changes in stockholders’ equity

Schedule of condensed consolidated financial statements

January 1, 2021

9 unchanged sentences

TOTAL STOCKHOLDERS’ EQUITY

April 1, 2021

STOCKHOLDERS’ EQUITY

Additional paid-in capital

Accumulated deficit

( 119,402,000 )

( 117,366,000 )

Accumulated other comprehensive loss

( 2,036,000 )

TOTAL AULT ALLIANCE STOCKHOLDERS’ EQUITY

Non-controlling interest

TOTAL STOCKHOLDERS’ EQUITY

$ 176,470,000

June 30, 2021

March 31, 2021

STOCKHOLDERS’ EQUITY

3 unchanged sentences

( 117,368,000 )

( 81,047,000 )

Accumulated other comprehensive loss

5 unchanged sentences

$ 176,470,000

the reclassification also resulted in a corresponding decrease in net income and a decrease in unrealized gains on equity securities,

the reclassification also resulted in a corresponding increase in net income and an increase in unrealized gains on equity securities,

related party within net cash used in operating activities, as reflected in the Company’s

1 unchanged sentence

Schedule of condensed consolidated statements of cash flows

For the Six Months Ended

June 30, 2021

For the Three Months Ended

March 31, 2021

Cash flows from operating activities:

$ ( 2,924,000 )

Adjustments to reconcile net income to net cash used in operating activities:

Depreciation and amortization

Amortization of right-of-use assets

Amortization, related party

Interest expense – debt discount

5 unchanged sentences

Stock-based compensation

Impairment of cryptocurrencies

Realized gains on sale of marketable securities

1 unchanged sentence

( 4,892,000 )

Unrealized losses (gains) on marketable securities

Unrealized gains on marketable securities

( 2,260,000 )

Unrealized losses (gains) on equity securities, related parties

Unrealized gains on equity securities, related party

( 2,969,000 )

1 unchanged sentence

Unrealized gains on equity securities

( 1,224,000 )

Loss from investment in unconsolidated entity

Changes in operating assets and liabilities:

5 unchanged sentences

Prepaid expenses and other current assets

Digital currencies

Accounts payable and accrued expenses

( 1,713,000 )

Accounts payable and accrued expenses

Other current liabilities

4 unchanged sentences

LIQUIDITY AND FINANCIAL

of June 30, 2022, the Company had cash and cash equivalents of $ 24.1 million and working capital of $ 51.4 million.

The Company has financed its operations principally through issuances of convertible debt, promissory notes and equity securities.

of March 31, 2022, the Company had cash and cash equivalents of $ 39.4 million and working capital of $ 55.6 million.

The Company has primarily

financed its operations principally through issuances of convertible debt, promissory notes and equity securities.

The Company believes

17 unchanged sentences

statements contained in the above referenced Form 10-K.

Results of the three and six months ended June 30, 2022, are not necessarily indicative

Results of the three months ended March 31, 2022, are not necessarily indicative

of the results to be expected for the full year ending December 31, 2022.

Significant Accounting

Other than as noted

below, there have been no material changes to the Company’s significant accounting policies previously disclosed in

the 2021 Annual Report.

Business Combination

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.

Acquired customer relations, technology, tradenames and know how are recognized at fair value.

The purchase price

allocation process requires management to make significant estimates and assumptions, especially at the acquisition date with respect

to intangible assets.

Direct transaction costs associated with the business combination are expensed as incurred.

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.

The Company includes the results of operations of the business that it

has acquired in its consolidated results prospectively from the date of acquisition.

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.

have been no material changes in the Company’s significant accounting policies to those previously disclosed in the 2021 Annual

Reclassifications

19 unchanged sentences

The Company does not expect that the adoption of this standard

will have a significant impact on its condensed consolidated financial statements.

In August 2020, the FASB

issued ASU 2020-06, “Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in

Entity’s Own Equity (Subtopic 815-40)-Accounting for Convertible Instruments and Contracts in an Entity’s Own

Equity” (“ASU 2020-06”).

The ASU simplifies accounting for convertible instruments by removing major separation

models required under current GAAP.

Consequently, more convertible debt instruments will be reported as a single liability

instrument with no separate accounting for embedded conversion features.

ASU 2020-06 removes certain settlement conditions that are

required for equity contracts to qualify for the derivative scope exception, which will permit more equity contracts to qualify for

ASU 2020-06 also simplifies the diluted net income per share calculation in certain areas.

The amendments in ASU 2020-06 are

effective for smaller reporting companies as defined by the SEC, for fiscal years beginning after December 15, 2023, including

interim periods within those fiscal years.

Effective January 1, 2022, the Company early adopted ASU 2020-06 using the modified

retrospective approach, which resulted in no impact on its condensed consolidated financial statements.

will have a significant impact on its condensed consolidated financial statements and related disclosures.

In August 2020, the FASB issued

ASU 2020-06, “Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own

Equity (Subtopic 815-40)-Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity” (“ASU 2020-06”).

The ASU simplifies accounting for convertible instruments by removing major separation models required under current GAAP.

Consequently,

more convertible debt instruments will be reported as a single liability instrument with no separate accounting for embedded conversion

ASU 2020-06 removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope

exception, which will permit more equity contracts to qualify for it.

ASU 2020-06 also simplifies the diluted net income per share calculation

in certain areas.

The amendments in ASU 2020-06 are effective for smaller reporting companies as defined by the SEC for fiscal years beginning

after December 15, 2023, including interim periods within those fiscal years.

Effective January 1, 2022, the Company early adopted ASU

2020-06 using the modified retrospective approach, which resulted in no impact on its consolidated financial statements.

In October 2021, the FASB

1 unchanged sentence

Customers,” which requires contract assets and contract liabilities acquired in a business combination to be recognized and measured

by the acquirer on the acquisition date in accordance with Accounting Standards Codification (“ASC”) 606, “Revenue from

Contracts with Customers.” The guidance will result in the acquirer recognizing contract assets and contract liabilities at the

same amounts recorded by the acquiree.

The guidance should be applied prospectively to acquisitions occurring on or after the effective

The guidance is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years.

Early adoption is permitted, including in interim periods, for any financial statements that have not yet been issued.

The Company is

currently evaluating this guidance to determine the impact it may have on its condensed consolidated financial statements.

by the acquirer on the acquisition date in accordance with ASC 606, “Revenue from Contracts with Customers.” The guidance

will result in the acquirer recognizing contract assets and contract liabilities at the same amounts recorded by the acquiree.

should be applied prospectively to acquisitions occurring on or after the effective date.

The guidance is effective for fiscal years beginning

after December 15, 2022, including interim periods within those fiscal years.

Early adoption is permitted, including in interim periods,

for any financial statements that have not yet been issued.

The Company is currently evaluating this guidance to determine the impact

it may have on its consolidated financial statements.

In November 2021, the FASB

1 unchanged sentence

of transactions involving government grants, including (1) the types of transactions, (2) the accounting for those transactions, and (3)

the effect of those transactions on an issuer’s financial statements.

the effect of those transactions on an entity’s financial statements.

The amendments in this update are effective for financial

1 unchanged sentence

The Company expects that this guidance will not have a significant

impact on its condensed consolidated financial statements.

impact on its consolidated financial statements.

REVENUE DISAGGREGATION

The following tables summarize

disaggregated customer contract revenues and the source of the revenue for the three and six months ended June 30, 2022 and 2021.

from lending and trading activities included in consolidated revenues were primarily interest, dividend and other investment income, which

disaggregated customer contract revenues and the source of the revenue for the three months ended March 31, 2022 and 2021.

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.

The Company’s disaggregated

revenues consisted of the following for the three months ended June 30, 2022:

revenues consist of the following for the three months ended March 31, 2022:

Schedule of disaggregated revenues

Three months ended June 30, 2022

Three months ended March 31, 2022

Cryptocurrency

Primary Geographical Markets

North America

Middle East and other

Revenue from contracts with customers

Revenue, lending and trading activities (North America)

Total revenue

Major Goods or Services

RF/microwave filters

Detector logarithmic video amplifiers

Power supply units

Power supply systems

Healthcare diagnostic systems

Electric vehicle chargers

Defense systems

Digital currency mining

Hotel operations

Revenue from contracts with customers

Revenue, lending and trading activities

Total revenue

Timing of Revenue Recognition

Goods transferred at a point in time

Services transferred over time

Revenue from contracts with customers

The Company’s disaggregated

revenues consisted of the following for the six months ended June 30, 2022:

Six months ended June 30, 2022

Primary Geographical Markets

(North America)

Middle East and other

Revenue from contracts with customers

Revenue, lending and trading activities (North America)

Total revenue

5 unchanged sentences

Healthcare diagnostic systems

Electric vehicle chargers

Defense systems

Digital currency mining

Digital currency mining, net

Hotel operations

7 unchanged sentences

The Company’s disaggregated

revenues consisted of the following for the three months ended June 30, 2021:

Three months ended June 30, 2021

Ault Alliance

Primary Geographical Markets

North America

Middle East and other

Revenue from contracts with customers

Revenue, lending and trading activities (North America)

Total revenue

RF/microwave filters

Detector logarithmic video amplifiers

Power supply units

Power supply systems

Healthcare diagnostic systems

Defense systems

Digital currency mining

Revenue from contracts with customers

Revenue, lending and trading activities

Total revenue

Timing of Revenue Recognition

Goods transferred at a point in time

Services transferred over time

Revenue from contracts with customers

The Company’s disaggregated

revenues consisted of the following for the six months ended June 30, 2021:

Six months ended June 30, 2021

revenues consist of the following for the three months ended March 31, 2021:

Three months ended March 31, 2021

Ault Alliance

1 unchanged sentence

North America

Middle East and other

Revenue from contracts with customers

Revenue, lending and trading activities (North America)

Revenue, lending and trading activities (North

Total revenue

17 unchanged sentences

Schedule of financial instrument measured at fair value

Fair Value Measurement at June 30, 2022

Investment in term promissory note of Ault & Company, Inc.

(“Ault & Company”) and other – a related party

Investment in common stock of Alzamend Neuro, Inc.

Fair Value Measurement at March 31, 2022

Investment in term promissory note of Ault &

Company, Inc.

(“Ault & Company”) and other – a

related party

Investment in common stock of Alzamend Neuro,

(“Alzamend”) – a related party

Investments in marketable equity securities

Cash and marketable securities held in trust account

Investments in other equity securities

Cash and marketable securities held in trust

Investments in equity securities

Total assets measured at fair value

2 unchanged sentences

Fair Value Measurement at December 31, 2021

Investment in term promissory note of Ault & Company and other – a related party

Investment in common stock of Alzamend – a related party

Investment in term promissory note of Ault &

Company and other – a related party

Investment in common stock of Alzamend – a related

Investments in marketable equity securities

Cash and marketable securities held in trust account

Investments in other equity securities

Investments in equity securities

Total assets measured at fair value

4 unchanged sentences

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.

following table summarizes the changes in investments in other equity securities measured and carried at fair value on a recurring basis

with the use of significant unobservable inputs (Level 3) for the six months ended June 30, 2022:

following table summarizes the changes in investments in equity securities measured and carried at fair value on a recurring basis with

the use of significant unobservable inputs (Level 3) for the three months ended March 31, 2022:

Schedule of other equity securities measured and carried at fair value

Investments in

equity securities

Balance at January 1, 2022

Investment in preferred stock

Investment in equity securities

Change in fair value of warrants

Unrealized gains on equity securities

Conversion to marketable securities

( 10,672,000 )

Balance at June 30, 2022

Balance at March 31, 2022

Note 8 for the changes in investments in Ault & Company measured and carried at fair value on a recurring basis with the use of significant

unobservable inputs (Level 3) during the three and six months ended June 30, 2022.

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

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.

As of June 30, 2022 and December

31, 2021, investments in other equity securities valued using a measurement alternative of $ 37.7 million and $ 21.3 million, respectively,

are included in other equity securities in the accompanying condensed consolidated balance sheets.

following table presents information on the assets measured at fair value on a nonrecurring basis by level within the fair value hierarchy

as of June 30, 2022 and December 31, 2021.

These investments were not measured due to an observable price change or impairment during the six months ended June

Schedule of investments not measured

Fair Value Measurement Using

Quoted prices

identical assets

As of June 30, 2022

Investments in other equity securities that do not report net asset value

Value Measurement Using

Quoted prices

identical assets

As of December 31, 2021

Investments in other equity securities that do not report net asset value

MARKETABLE EQUITY SECURITIES

Marketable equity securities

with readily determinable market prices consisted of the following as of June 30, 2022 and December 31, 2021:

unobservable inputs (Level 3) during the three months ended March 31, 2022.

Marketable Securities

Marketable securities in equity

securities with readily determinable market prices consisted of the following as of March 31, 2022 and December 31, 2021:

Schedule of marketable equity securities

Marketable equity securities at June 30, 2022

Marketable equity securities at March 31, 2022

Gross unrealized

7 unchanged sentences

$ ( 13,127,000 )

The Company’s investment

in marketable equity securities are revalued on each balance sheet date.

At March 31, 2022 and December

31, 2021, the Company invested in the marketable equity securities of publicly traded companies.

The Company’s investment in marketable

equity securities are revalued on each balance sheet date.

PROPERTY AND EQUIPMENT, NET

At June 30, 2022 and December

At March 31, 2022 and December

31, 2021, property and equipment consisted of:

Schedule of property and equipment

June 30, 2022

March 31, 2022

December 31, 2021

11 unchanged sentences

$ 174,025,000

For the six months ended June

30, 2022 and 2021, depreciation expense amounted to $ 6.3 million and $ 0.4 million, respectively.

BUSINESS COMBINATIONS

Overview of AVLP Acquisition

On June 1, 2022, the

Company converted the principal amount under the convertible promissory notes issued to it by AVLP and accrued but unpaid interest

into common stock of AVLP.

The Company converted $ 20.0

million in principal and $ 5.9

million of accrued interest receivable at a conversion price of $0.50 per share and received 51,889,168 shares of common stock

increasing its common stock ownership of AVLP from less than 20 %

to approximately 92 %.

Prior to the conversion of

the convertible promissory notes, the Company accounted for its investment in AVLP as an investment in an unconsolidated entity under

the equity method of accounting.

In connection with the conversion of the convertible promissory notes, the Company’s consolidated

financial statements now include all of the accounts of AVLP, and any significant intercompany balances and transactions have been eliminated

in consolidation.

consideration transferred for the Company’s approximate 92% ownership interest in connection with this acquisition aggregated

$20.7 million, which represented the fair value of the Company’s holdings in AVLP immediately prior to conversion.

carrying amount of the Company’s holdings in AVLP immediately prior to conversion was $23.4 million, resulting in a $2.7

million loss for the related remeasurement, which was recognized in interest and other income.

The allocation of the total consideration

transferred to the assets acquired, including intangible assets and goodwill, and the liabilities assumed is preliminary and could

be revised as a result of additional information obtained due to the finalization of a third-party valuation report, leases and

related commitments, tax related matters and contingencies and certain assets and liabilities, including receivables and payables.

Amounts will be finalized within the measurement period, which will not exceed one year from the acquisition date.

resulting from this acquisition is not tax deductible.

following table presents the preliminary allocation of the consideration transferred to the assets acquired and liabilities assumed

based on their fair values.

Schedule of preliminary allocation

Total purchase consideration

Fair value of non-controlling interest

Total consideration

Identifiable net liabilities assumed:

Prepaid expenses and other current assets

Property and equipment

Note receivable

Accounts payable and accrued expenses

( 6,935,000 )

Convertible notes payable, principal

( 9,734,000 )

Fair value of embedded derivative

( 1,226,000 )

Fair value of bifurcated conversion option

Fair value of bifurcated put option

Net liabilities assumed

( 15,363,000 )

The Company consolidates the

results of AVLP on a one-month lag, therefore the statements of operations do not include results for AVLP for the three and six months

ended June 30, 2022.

Overview of SMC Acquisition

Beginning in June 2022, the Company, through its subsidiary Digital Power Lending, LLC (“DP Lending”), began

making open market purchases of SMC common stock.

These purchases granted the Company a greater than 20% effective ownership on June

9, 2022, and subsequently, on June 15, 2022, the

Company owned more than 50% of the issued and outstanding common stock of SMC.

The Company’s ownership of SMC stands at 51.6%

as of June 30, 2022.

As of June 15,

2022 (“Acquisition Date”), the purchase price of the common stock acquired totaled $ 7.4 million and on June 15,

2022 a $ 3.1 million gain was recognized in interest and other income for the remeasurement of the Company’s previously held

ownership interest to $ 10.5 million, based on the trading price of SMC common stock.

The Company also recognized non-controlling

interest at fair value as of the Acquisition Date in the amount of $ 10.3 million.

The allocation of the total

consideration transferred to the assets acquired, including intangible assets and goodwill, and the liabilities assumed, is preliminary

and could be revised as a result of additional information obtained due to the finalization of a third-party valuation report, leases

and related commitments, tax related matters and contingencies and certain assets and liabilities, including receivables and payables.

Amounts will be finalized within the measurement period, which will not exceed one year from the Acquisition Date.

The goodwill resulting

from this acquisition is not tax deductible.

The Company consolidates the

results of SMC on a one-quarter lag as it enables the Company to report its quarterly results independent from the timing of when SMC

reports its results, therefore the statements of operations do not include results for SMC for the three and six months ended June 30,

The following table presents

the preliminary allocation of the consideration transferred to the assets acquired and liabilities assumed based on their fair values.

Schedule of assets acquired and liabilities assumed

Total purchase consideration

Fair value of non-controlling interest

Total consideration

Identifiable net assets acquired:

Accounts receivable

Prepaid expenses and other current assets

Property and equipment, net

Right-of-use assets

Intangible assets:

Trade names-estimated useful life of 19 years

Customer relationships-estimated useful life of 16 years

Proprietary technology-estimated useful life of 3 years

Accounts payable and accrued expenses

( 10,052,000 )

Notes payable

( 2,972,000 )

Lease liabilities

( 1,124,000 )

Net assets acquired

Unaudited Pro Forma Financial Information

The following unaudited pro

forma consolidated results of operations for the three and six months ended June 30, 2022 have been prepared as if the SMC acquisition

had occurred on January 1, 2022.

Schedule of pro forma consolidated results of operations

Three Months Ended

Six Months Ended

June 30, 2022

Total revenues

Net loss attributable to BitNile Holdings, Inc.

$ ( 26,206,000 )

$ ( 56,531,000 )

The unaudited pro forma information

is presented for informational purposes only and is not necessarily indicative of the results of operations that would have been achieved

had the acquisition been consummated as of that time, nor is it intended to be a projection of future results.

The Company’s goodwill

increased due to the acquisition of controlling interests in AVLP on June 1, 2022 and SMC on June 15, 2022.

The following table summarizes

the changes in the Company’s goodwill for the six months ended June 30, 2022:

Schedule of goodwill

Balance as of January 1, 2022

Acquisition of AVLP

Acquisition of SMC

Effect of exchange rate changes

Balance as of June 30, 2022

INCREASE IN OWNERSHIP INTEREST OF SUBSIDIARIES

On May 12, 2022, BNI closed

a $ 1.8 million membership interest purchase agreement whereby BNI acquired the 30 % minority interest of Alliance Cloud Services, LLC (“ACS”)

which BNI did not previously own, resulting in ACS becoming a wholly-owned subsidiary of BNI.

ACS owns and operates the Company’s

Michigan data center, where BNI conducts the Company’s Bitcoin mining operations.

Between June 15, 2022 and

June 30, 2022, DP Lending increased the Company’s ownership interest in SMC through the open market purchase of approximately 55,000

shares for $ 430,000 .

For the three months ended

March 31, 2022 and 2021, depreciation expense amounted to $ 2.6 million and $ 0.2 million, respectively.

INVESTMENTS – RELATED PARTIES

Investments in Alzamend and

Ault & Company at June 30, 2022 and December 31, 2021, were comprised of the following:

Ault & Company at March 31, 2022 and December 31, 2021, were comprised of the following:

Investment in Promissory Notes, Related

8 unchanged sentences

The following table summarizes

the changes in the Company’s investments in Alzamend and Ault & Company during the six months ended June 30, 2022:

the changes in the Company’s investments in Alzamend and Ault & Company during the three months ended March 31, 2022:

Schedule of investments in Alzamend and Ault

2 unchanged sentences

Investment in

promissory notes of

Ault & Company

promissory notes and

advances of Alzamend

and Ault & Company

Balance at January 1, 2022

4 unchanged sentences

Accrued interest

Balance at June 30, 2022

Balance at March 31, 2022

Investments in

Alzamend Common Stock

following table summarizes the changes in the Company’s investments in Alzamend common stock during the six months ended June 30,

following table summarizes the changes in the Company’s investments in Alzamend common stock during the three months ended March

Schedule of investments in Alzamend common stock

1 unchanged sentence

Balance at January 1, 2022

March 9, 2021 securities purchase agreement *

Open market purchases after initial public offering

1 unchanged sentence

( 4,691,000 )

Balance at June 30, 2022

* Pursuant to the March 9, 2021 securities purchase

agreement, in aggregate, Alzamend agreed to sell up to 6,666,667 shares of its common stock to DP Lending for $10.0 million, or $1.50

per share, and issue to DP Lending warrants to acquire 3,333,334 shares of Alzamend common stock with an exercise price of $3.00 per

As of December 31, 2021, DP Lending funded $6.0 million, including the conversion of notes and advances of $0.8 million, and the

remaining $4.0 million was funded upon Alzamend achieving certain milestones during the three months ended June 30, 2022.

INVESTMENT IN UNCONSOLIDATED ENTITY – AVLP

Investment in Alzamend common stock

Investment in Alzamend options

Balance at March 31, 2022

INVESTMENT IN UNCONSOLIDATED ENTITY –

Avalanche International Corp.

Equity Investments in Unconsolidated Entity

Company converted its AVLP convertible promissory note on June 1, 2022 as part of the acquisition of AVLP (see Note 8).

investments in the then unconsolidated entity, AVLP, at December 31, 2021, were comprised of the following:

Equity investments in an unconsolidated

entity, AVLP, at March 31, 2022 and December 31, 2021, were comprised of the following:

Investment in Promissory Notes

Schedule of convertible promissory note

Interest rate

December 31, 2021

Investment in convertible promissory note

5 unchanged sentences

( 2,000,000 )

Total investment in promissory note

following table summarizes the changes in the Company’s equity investments in the then unconsolidated entity, AVLP, during the

six months ended June 30, 2022:

Schedule ofchanges in the equity investments

* During the three months ended March 31, 2022

and 2021, no interest income was recognized from the Company’s investment in AVLP.

AVLP Convertible Promissory Note Maturities

The contractual maturities

of AVLP’s convertible promissory notes as of March 31, 2022 were:

Schedule of convertible promissory note maturities

The following table summarizes

the changes in the Company’s equity investments in an unconsolidated entity, AVLP, during the year ended December 31, 2021 and the

three months ended March 31, 2022:

Schedule of changes in the equity investments

Investment in

3 unchanged sentences

Investment in convertible promissory notes

Loss from equity investment

Accrued interest

Loss on remeasurement upon conversion

( 2,700,000 )

Conversion of AVLP convertible promissory notes

( 17,040,000 )

Elimination of intercompany debt after conversion

Fair value of warrants

Unrealized loss in warrants

( 7,772,000 )

Balance at June 30, 2022

Unrealized gain in common stock

Loss from equity investment

Accretion of discount

Accrued interest

Balance at January 1, 2022

Investment in convertible promissory notes

Loss from equity investment

Balance at March 31, 2022

CONSOLIDATED VARIABLE INTEREST ENTITY -

1 unchanged sentence

Interest Entity

As of June 30, 2022 and December

31, 2021, the Company held an investment in Ault Alpha LP (“Alpha Fund”).

Alpha Fund operates as a private investment fund.

The general partner of Alpha Fund, Ault Alpha GP LLC (“Alpha GP”) is owned by Ault Capital Management LLC (the “Investment

Manager”), which also acts as the investment manager to Alpha Fund.

The Investment Manager is owned by Ault & Company.

Ault, Horne, Nisser and Cragun, who serve as executive officers and/or directors of the Company, are executive officers of the Investment

Manager, and Messrs.

Ault, Horne and Nisser are executive officers and directors of Ault & Company.

As of June 30, 2022, DP Lending

subscribed for $ 25 million or 100 % of the limited partnership interests in Alpha Fund, the full amount of which was funded, an increase

of $ 8 million from the $ 17 million subscribed and funded as of December 31, 2021.

These investments are subject to a rolling five-year

lock-up period, provided that after three years, Alpha GP will waive 24 months of the lock-up period upon receipt of written notice from

an executive officer of the Company that a withdrawal of capital is required to prevent a going concern opinion from the Company’s

auditors, under the terms of Alpha Fund’s partnership agreement and side letter entered into between the Company and Alpha Fund.

During the three months ended

March 31, 2022 and the year ended December 31, 2021, the Company invested in Ault Alpha LP (the “Alpha Fund”).

The Alpha Fund

operates as a private investment fund.

The general partner of the Alpha Fund, Ault Alpha GP LLC (“Alpha GP”) is owned by Ault

Capital Management LLC (the “Investment Manager”), which also acts as the investment manager to the Alpha Fund.

The Investment

Manager is owned by Ault & Company.

Ault, Horne, Nisser and Cragun, who serve as executive officers and/or directors of the

Company, are executive officers of the Investment Manager, and Messrs.

Ault, Horne and Nisser are executive officers and directors of

Ault & Company.

As of March 31, 2022, the

Company subscribed for $ 18 million or 100 % of the limited partnership interests in the Alpha Fund, the full amount of which was funded,

an increase of $1 million from the $ 17 million subscribed and funded as of December 31, 2021.

These investments are subject to a rolling

five-year lock-up period, provided that after three years, Alpha GP will waive the last twenty-four (24) months of the lock-up period

upon receipt of written notice from an executive officer of the Company that a withdrawal of capital is required to prevent a going concern

opinion from the Company’s auditors, under the terms of the Alpha Fund’s partnership agreement and side letter entered into

between the Company and the Alpha Fund.

The Company consolidates Alpha

1 unchanged sentence

of its investment, and its ability to participate in policy making decisions, the Company is considered the primary beneficiary of the

Investments by Alpha Fund – Treasury

As of June 30, 2022, Alpha

Fund owned 22,225,000 shares of the Company’s common stock and 53,033 shares of the Company’s 13.00 % Series D Cumulative Redeemable

Perpetual Preferred Stock (the “Series D Preferred Stock”), accounted for as treasury stock as of June 30, 2022.

Investments by Alpha Fund

– Treasury Stock

As of March 31, 2022, the

Alpha Fund owned 7,100,000 shares of the Company’s common stock, accounted for as treasury stock as of March 31, 2022.

ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Other current liabilities at June 30,

Other current liabilities at March 31,

2022 and December 31, 2021 consisted of:

4 unchanged sentences

Accrued legal

Interest payable

Other accrued expenses

9 unchanged sentences

Schedule of Financial Instrument

June 30, 2022

December 31, 2021

Contractually stipulated stock price

10 unchanged sentences

The following table sets forth

a summary of the changes in the estimated fair value of the financial instruments during the six months ended June 30, 2022 and 2021:

a summary of the changes in the estimated fair value of the financial instruments during the three months ended March 31, 2022 and 2021:

Schedule of fair value of the financial instruments

June 30, 2022

June 30, 2021

March 31, 2022

March 31, 2021

Beginning balance

Change in fair value

Extinguishment

( 3,339,000 )

Ending balance

NOTES PAYABLE

Notes payable at June 30,

2022 and December 31, 2021, were comprised of the following.

Schedule of notes payable

Short-term notes payable

10% original issue discount senior secured notes

AGREE Madison secured construction loans

January 1, 2025

SMC line of credit

June 11, 2023

SMC installment notes

June 18, 2024

SMC notes payable

XBTO Trading note payable

December 30, 2023

Short-term bank line of credit

Renews monthly

Total notes payable

$ 122,105,000

Unamortized debt discounts

( 1,044,000 )

( 27,496,000 )

Total notes payable, net

current portion

( 7,340,000 )

( 39,554,000 )

Notes payable – long-term portion

SMC Debt Security Interest

The SMC debt is secured by

a perfected security interest in all SMC assets including a first-priority security interest in SMC accounts receivable and inventory.

Amortization of Debt Discount of Secured

Promissory Notes

AMORTIZATION OF DEBT DISCOUNT OF SECURED PROMISSORY NOTES

On December 30, 2021, the

Company entered into a securities purchase agreement with certain accredited investors providing for the issuance of:

Company entered into a securities purchase agreement with certain sophisticated investors providing for the issuance of:

· secured promissory notes (the “Secured Promissory Notes”) that bear interest at 8 % per annum

11 unchanged sentences

is included within interest expense on the condensed consolidated statements of operations.

CONVERTIBLE NOTES

Convertible notes payable at June 30, 2022 and

December 31, 2021, were comprised of the following:

Schedule of convertible notes payable

Conversion price

Convertible promissory note

AVLP convertible promissory notes

$ 0.35 (AVLP stock)

August 22, 2025

Fair value of embedded derivative

Fair value of bifurcated conversion option

Fair value of bifurcated put option

unamortized debt discounts

Total convertible notes payable, net of financing cost

current portion

Total convertible notes payable, net of financing cost, long term

AVLP convertible promissory notes

The AVLP convertible notes

payable are due and payable on August 22, 2025, with interest at 7% per annum.

At the election of the holders, outstanding principal

and accrued but unpaid interest under the notes are convertible into shares of AVLP’s common stock at a conversion price equal

to either (i) if the aggregate market capital of AVLP on the date of conversion (the “Market Cap”) is $35 million or less,

at a 25% discount to the market price, or (ii) if the Market Cap is greater than $35 million, at a 25% discount to the market price,

provided that such discount shall be increased by dividing it by the quotient that shall be obtained by dividing $35 million by the Market

Cap at the time of conversion, provided, however, any increase in the discount to the market price shall not result in a discount that

is greater than a 75% discount (the “Conversion Price”).

Notwithstanding the foregoing, in no event shall the Conversion

Price be less than $0.35.

COMMITMENTS AND CONTINGENCIES

34 unchanged sentences

On December 4, 2020, the Court

issued an Order directing the parties to engage in limited discovery to be completed by March 4,

issued an Order directing the parties to engage in limited discovery (the “Limited Discovery”) to be completed by March 4,

In connection therewith, the Court also denied the defendants’ motion to dismiss without prejudice.

On June 2, 2021, the Company

and its subsidiary filed a motion to dismiss the Amended Complaint in its entirety as against the

Company, and the promissory estoppel claim as against the subsidiary.

On August 8, 2022, the Court

issued an Order denying the motion to dismiss, in its entirety.

The deadline for the Company

and its subsidiaries to file an Answer to the Amended Complaint is September 2, 2022.

and its subsidiary filed a motion to dismiss the amended complaint in its entirety as against the Company, and the promissory estoppel

claim as against the subsidiary.

The motion to dismiss has

been fully briefed and is currently pending before the Court.

Based on the Company’s

3 unchanged sentences

a reserve in the amount of the unpaid portion of the purchase agreement, which is included in accounts payable and accrued expenses.

unfavorable outcome may have a material adverse effect on the Company’s business, financial condition and results of operations.

An unfavorable outcome may have a material adverse effect on the Company’s business, financial condition and results of operations.

Ding Gu (a/k/a Frank Gu) and Xiaodan Wang

69 unchanged sentences

2022 Issuances

2022 ATM Offering – Common Stock

2022 ATM Offering

On February 25, 2022, the

Company entered into an At-The-Market issuance sales agreement with Ascendiant Capital Markets, LLC (“Ascendiant Capital”)

to sell shares of common stock having an aggregate offering price of up to $ 200 million from time to time, through an “at the market

offering” program (the “2022 Common ATM Offering”).

As of June 30, 2022, the Company had sold an aggregate of 239.7

million shares of common stock pursuant to the 2022 Common ATM Offering for gross proceeds of $ 163.4 million.

Public Offering of Series D Preferred Stock

The Company has designated

2,000,000 shares of preferred stock, par value $0.001 per share, of the Company as the Series D Preferred Stock.

On June 3, 2022, the Company

announced the closing of its public offering of 144,000 shares of its Series D Preferred Stock at a price to the public of $25.00 per

Gross proceeds from the offering were approximately $3.6 million, before deducting offering expenses.

Net proceeds to the Company,

after payment of commissions, non-accountable fees and offering expenses were $3.1 million.

2022 ATM Offering – Preferred Stock

On June 14, 2022, the Company

entered into an At-The-Market equity offering program with Ascendiant Capital under which it may sell, from time to time, shares of its

Series D Preferred Stock for aggregate gross proceeds of up to $ 46,400,000 (the “2022 Preferred ATM Offering”).

30, 2022, the Company had sold an aggregate of 2,618 shares of Series D Preferred Stock pursuant to the 2022 Preferred ATM Offering for

gross proceeds of $ 57,000 .

Company calculates its interim income tax provision in accordance with ASC Topic 270, Interim Reporting, and ASC Topic 740, Income Taxes.

The Company’s effective tax rate (“ETR”) from continuing operations was 0.4 % and ( 7.4 %) for the six months ended

June 30, 2022 and 2021, respectively.

The Company an income tax provision of $ 0.2 million and $ 3.5 million for the six months ended

June 30, 2022 and 2021, respectively.

The difference between the ETR and federal statutory rate of 21 % is primarily attributable

to items recorded for GAAP but permanently disallowed for U.S.

Company entered into an At-The-Market issuance sales agreement with Ascendiant Capital Markets to sell shares of common stock having an

aggregate offering price of up to $ 200 million from time to time, through an “at the market offering” program (the “2022

ATM Offering”).

As of March 31, 2022, the Company had sold an aggregate of 140.0 million shares of common stock pursuant to the

2022 ATM Offering for gross proceeds of $ 110.1 million.

Company calculates its interim income tax provision in accordance with ASC 270 and ASC 740.

The Company’s effective tax rate (“ETR”)

from continuing operations was 0.0 % and 0.2 % for the three months ended March 31, 2022 and 2021, respectively.

The Company had no provision for income taxes for the three months

ended March 31, 2022 and recorded an income tax provision of $ 6,000 for the three months ended March 31, 2021.

The difference between the ETR and federal statutory rate of 21 % is primarily attributable to items recorded for GAAP but permanently

disallowed for U.S.

federal income tax purposes and changes in valuation allowance.

(LOSS) INCOME PER SHARE

For the three and six months

ended June 30, 2022, net loss per share is computed by dividing the net loss to common stockholders by the weighted average number of

common shares outstanding.

The calculation of the basic and diluted earnings per share is the same for the three and six months ended

June 30, 2022, as the effect of the potential common stock equivalents is anti-dilutive due to the Company’s net loss position for

Anti-dilutive securities, which are convertible into or exercisable for the Company’s common stock, consisted of the

following at June 30, 2022:

NET INCOME (LOSS) PER SHARE

For the three months ended

March 31, 2022, net loss per share is computed by dividing the net loss to common stockholders by the weighted average number of common

shares outstanding.

The calculation of the basic and diluted earnings per share is the same for the three months ended March 31, 2022,

as the effect of the potential common stock equivalents is anti-dilutive due to the Company’s net loss position for the period.

Anti-dilutive securities, which are convertible into or exercisable for the Company’s common stock, consist of the following at

March 31, 2022:

Net Loss Per Share

June 30, 2022

Schedule of net loss per share

March 31, 2022

Stock options

3 unchanged sentences

Basic and diluted net income

per common share for the three and six months ended June 30, 2021 are calculated as follows:

per common share for the three months ended March 31, 2021 were calculated as follows:

Schedule of basic and diluted net income per common share

For the Three Months Ended June 30, 2021

(Denominator)

Net income attributable to BitNile Holdings

Preferred stock dividends

Basic earnings per share

Net income available to common stockholders

Effect of dilutive securities

Stock options

4% convertible notes

Diluted earnings per share

Income available to common stockholders plus assumed conversions

For the Six Months Ended June 30, 2021

For the Three Months Ended March 31, 2021

(Denominator)

5 unchanged sentences

Stock options

8% convertible notes, related party

4% convertible notes

3 unchanged sentences

The Company had six reportable

segments as of June 30, 2022 and three as of June 30, 2021;

segments as of March 31, 2022 and three as of March 31, 2021;

see Note 1 for a brief description of the Company’s business.

The following data presents

the revenues, expenditures and other operating data of the Company’s operating segments for the three and six months ended June

the revenues, expenditures and other operating data of the Company’s operating segments for the three months ended March 31, 2022:

Schedule of operating segments

Three Months Ended June 30, 2022

Ault Alliance

Revenue, cryptocurrency mining

Revenue, commercial real estate leases

Revenue, lending and trading activities

Revenue, hotel operations

Total revenues

Depreciation and amortization expense

Loss from operations

$ ( 1,076,000 )

$ ( 445,000 )

$ ( 11,486,000 )

$ ( 3,454,000 )

$ ( 166,000 )

$ ( 489,000 )

$ ( 6,603,000 )

$ ( 23,719,000 )

Capital expenditures for the three months ended June 30, 2022

Six Months Ended June 30, 2022

Revenue, cryptocurrency mining

Revenue, commercial real estate leases

Revenue, lending and trading activities

Cryptocurrency

Revenue, cryptocurrency

Revenue, commercial real

estate leases

Revenue, lending and trading

Revenue, hotel operations

8 unchanged sentences

$ ( 7,521,000 )

$ ( 22,689,000 )

Capital expenditures for the six months ended June 30, 2022

AVLP and SMC Segment Information

The AVLP and SMC acquisitions

were completed in June 2022.

The results of operations were not material to the Company’s consolidated results of operations for

the three and six months ended June 30, 2022.

As of June 30, 2022, identifiable assets for AVLP and SMC were $ 49.9 million and $ 35.0

million, respectively.

Capital expenditures for the

three months ended March 31,

Segment information for the

three and six months ended June 30, 2021:

Three Months Ended June 30, 2021

Revenue, cryptocurrency mining

Revenue, commercial real estate leases

Revenue, lending and trading activities

Revenue, hotel operations

Total revenues

Depreciation and amortization expense

Income (loss) from operations

$ ( 1,000,000 )

$ ( 197,000 )

$ ( 118,000 )

$ ( 2,354,000 )

Capital expenditures for the three months ended June 30, 2021

Six Months Ended June 30, 2021

Revenue, cryptocurrency mining

Revenue, commercial real estate leases

three months ended March 31, 2021:

Revenue, cryptocurrency mining, net

Revenue, lending and trading activities

Revenue, hotel operations

Total revenues

3 unchanged sentences

$ ( 2,844,000 )

$ ( 188,000 )

$ ( 5,197,000 )

Capital expenditures for the six months ended June 30, 2021

CONCENTRATIONS

OF CREDIT AND REVENUE RISK

Accounts receivable are concentrated with certain

large customers.

At June 30, 2022, approximately 38 %

of accounts receivable were due from two customers in North America, each of which individually accounted for over 10%

of consolidated accounts receivable.

the three months ended June 30, 2022, one customer represented 13 % of consolidated revenues.

Capital expenditures for the three months

ended March 31, 2021

SUBSEQUENT EVENTS

2022 Common ATM Offering

2022 ATM Offering

During the period between

July 1, 2022 through August 18, 2022, the Company sold an aggregate of 6.5 million shares of common stock pursuant to the 2022 Common

ATM Offering for gross proceeds of $ 2.1 million.

2022 Preferred

the period between July 1, 2022 through August 18, 2022, the Company sold an aggregate of 6,866 shares of Series D Preferred Stock pursuant

to the 2022 Preferred ATM Offering for gross proceeds of $ 126,000 .

April 1, 2022 through May 20, 2022, the Company sold an aggregate of 88.2 million shares of common stock pursuant to the 2022 ATM Offering

for gross proceeds of $ 49.4 million.

Investments in Alpha Fund

During the period between

July 1, 2022 through August 18, 2022, DP Lending purchased an additional $6.5 million of limited partnership interests in Alpha Fund.

As of August 18, 2022, DP Lending had subscribed for $31.5 million of limited partnership interests.

Formation of Ault Energy

On July 11, 2022, the Company

announced the formation of Ault Energy, LLC (“Ault Energy”), as an indirect wholly-owned subsidiary of the Company through

Ault Alliance.

Ault Energy will partner with White River Holdings Corp.

(“White River”), a wholly owned subsidiary of Ecoark

Holdings, Inc.

(“Ecoark”), on drilling projects across 30,000 acres in Texas, Louisiana and Mississippi.

Ault Energy, as DP

Lending’s designee, has the right to purchase up to 25 %, or such higher percentages at the discretion of White River, in various

drilling projects of White River.

In August 2022, Ault Energy committed to purchasing 40% of the first drilling project offered, at a

cost to Ault Energy of approximately $1 million.

Note Purchase Agreement

On August 10, 2022, the Company,

through its BNI and DP Lending subsidiaries, entered into a note purchase agreement providing for the issuance of secured promissory notes

with an aggregate principal face amount of $11,000,000 and an interest rate of 10%.

The purchase price (proceeds to the Company) for the

secured promissory notes was $10.0 million.

The secured promissory notes have a security interest in marketable securities, investments

and certain Bitcoin mining equipment.

The secured promissory notes are further secured by a guaranty provided by the Company, as well

as by Milton C.

Ault, the Executive Chairman of the Company.

The maturity date of the secured

promissory notes is August 10, 2023.

The Company is required to make monthly payment (principal and interest) of $1,000,000 on the tenth

calendar day of each month, starting in September 2022.

After six months, the Company may elect to pay a forbearance fee of $250,000 in

lieu of a monthly payment, which would extend the maturity date of the related secured promissory notes.

Hosting Agreement

August 15, 2022, the Company, through its BNI subsidiary, entered into a hosting agreement with Compute North LLC (“Compute North”)

to host 6,500 S19j Pro Antminers owned by BNI for a period of five years.

The Company granted Compute North a continuing first-position

security interest in the hosted miners, as collateral for the Company’s obligations under the hosting agreement.

April 1, 2022 through May 16, 2022, the Company purchased an additional $ 3.0 million of limited partnership interests in the Alpha Fund.

As of May 16, 2022, the Company had subscribed for $ 21.0 million of limited partnership interests.

Investments in Alzamend

On April 26, 2022, DP Lending

funded the remaining $ 4 million due to Alzamend upon its achievement of the final milestone.

EYP Acquisition

On April 25, 2022, the Company

announced that its subsidiary, Ault Alliance has agreed to lend approximately $12 million (inclusive of existing loans) through a

super-priority debtor-in-possession (“DIP”) loan to, and entered into an asset purchase agreement with, EYP, Inc.

affiliates (“EYP”) providing for the acquisition of all of EYP’s assets for an aggregate consideration of approximately

$68 million (the “Asset Purchase”).

Ault Alliance will also make an offer of employment to all current employees of EYP.

is an integrated architecture, engineering, and design services company specializing in higher education, healthcare, government and science

& technology with offices in 11 cities across the United States.

The asset purchase agreement

constitutes a “stalking horse” bid in a sale process being conducted under Section 363 of the U.S.

Bankruptcy Code.

Ault Alliance’s acquisition of EYP’s assets remains subject to approval by the United States Bankruptcy Court for the District

of Delaware, following court-approved bidding procedures, including the potential receipt of competing offers for EYP’s assets at

It is expected that the sale process will be completed by June 2022, and that throughout the sale process, the business will

continue to operate in the ordinary course providing services to its customers.

As part of the purchase, Ault Alliance will be able to

include the value of its DIP loan as part of its bid at closing.

Consummation of the Asset Purchase

is subject to Bankruptcy Court approved bidding procedures, higher and better offers made in the auction by other potential bidders, approval

of the highest bidder by the Bankruptcy Court and customary closing conditions.

Increase in Ownership of Alliance Cloud

Services, LLC

On May 12, 2022, BNI closed

a $ 1.8 million membership interest purchase agreement whereby BNI acquired the 30 % minority interest of Alliance Cloud Services, LLC (“ACS”)

which BNI did not previously own, resulting in ACS becoming a wholly-owned subsidiary of BNI.

ACS owns and operates the Company’s

Michigan data center, where BNI conducts the Company’s Bitcoin mining operations.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q/A

Item 1. Financial Statements