What changed in this filing

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Item 1. Financial Statements

2025-05-20 compared with 2024-11-19 · 667 added, 1251 removed, 656 unchanged (75% of the section changed)

3 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

September 30,

CURRENT ASSETS

1 unchanged sentence

Restricted cash

Marketable equity securities

Accounts receivable, net

2 unchanged sentences

Prepaid expenses and other current assets

Current assets of discontinued operations

TOTAL CURRENT ASSETS

Cash and marketable securities held in trust account

Intangible assets, net

13 unchanged sentences

Guarantee liability

Current liabilities of discontinued operations

TOTAL CURRENT LIABILITIES

LONG-TERM LIABILITIES

Operating lease liability, non-current

Notes payable, non-current

TOTAL LIABILITIES

The accompanying notes are an integral part of

3 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS (continued)

September 30,

LONG TERM LIABILITIES

Operating lease liability, non-current

Notes payable, non-current

Convertible notes payable, non-current

Deferred underwriting commissions of Ault Disruptive Technologies Corporation (“Ault Disruptive”) subsidiary

TOTAL LIABILITIES

COMMITMENTS AND CONTINGENCIES

Redeemable non-controlling interests in equity of subsidiaries

STOCKHOLDERS’ EQUITY

Series A Convertible Preferred Stock, $ 25 stated value per share, $ 0.001 par value – 1,000,000 shares authorized;

7,040 shares issued and outstanding at September 30, 2024 and December 31, 2023 (liquidation preference of $ 176,000 as of September 30, 2024 and December 31, 2023)

Series C Convertible Preferred Stock, $ 1,000 stated value per share, share, $ 0.001 par value – 75,000 shares authorized;

44,300 and 41,500 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively (liquidation preference of $ 44,300,000 and $ 41,500,000 at September 30, 2024 and December 31, 2023, respectively)

Series D Cumulative Redeemable Perpetual Preferred Stock, $ 25 stated value per share, $ 0.001 par value – 2,000,000 shares authorized;

323,835 shares and 425,197 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively (liquidation preference of $ 8,096,000 and $ 10,630,000 as of September 30, 2024 and December 31, 2023, respectively)

Preferred stock, $ 0.00 1 par value - 25,000,000 shares authorized;

2,160,267 and 2,029,450 shares issued and outstanding at March 31, 2025 and December 31, 2024, respectively (liquidation preference of $ 79,630,000 as of March 31, 2025)

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

38,846,318 and 4,483,459 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively

1,429,995 and 1,259,893 shares issued and outstanding at March 31, 2025 and December 31, 2024, respectively

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

0 shares issued and outstanding at September 30, 2024 and December 31, 2023

4,995,724 and 4,998,597 shares issued and outstanding at March 31, 2025 and December 31, 2024, respectively

Additional paid-in capital

3 unchanged sentences

Accumulated other comprehensive loss

( 1,222,000 )

( 2,097,000 )

Treasury stock, at cost

( 30,571,000 )

TOTAL HYPERSCALE DATA STOCKHOLDERS’ EQUITY

Non-controlling interest

( 6,546,000 )

TOTAL STOCKHOLDERS’ EQUITY

8 unchanged sentences

AND COMPREHENSIVE LOSS

For the Three Months Ended

For the Nine Months Ended

September 30,

For the Three Months Ended March 31,

Revenue, crane operations

Revenue, crypto assets mining

Revenue, hotel and real estate operations

Revenue, crane operations

Revenue, lending and trading activities

Revenue, other

Total revenue

Cost of revenue, products

Cost of revenue, crane operations

Cost of revenue, crypto assets mining

Cost of revenue, hotel and real estate operations

Cost of revenue, crane operations

Cost of revenue, lending and trading activities

Cost of revenue, other

Total cost of revenue

3 unchanged sentences

General and administrative

Impairment of property and equipment

Impairment of goodwill and intangible assets

Impairment of mined crypto assets

Total operating expenses

Loss from operations

( 24,595,000 )

( 20,350,000 )

( 47,869,000 )

(Loss) income from operations

( 6,384,000 )

4 unchanged sentences

( 5,631,000 )

( 18,825,000 )

( 35,180,000 )

Gain on conversion of investment in equity securities to marketable equity securities

1 unchanged sentence

( 4,569,000 )

( 1,700,000 )

Loss from investment in unconsolidated entity

( 1,958,000 )

Impairment of equity securities

( 6,266,000 )

( 9,555,000 )

Gain on deconsolidation of subsidiary

Provision for loan losses, related party

( 3,068,000 )

Change in fair value of warrant liability

Gain (loss) on the sale of fixed assets

(Loss) gain on the sale of fixed assets

Total other expense, net

( 7,208,000 )

( 6,938,000 )

( 9,533,000 )

( 37,440,000 )

Loss before income taxes

( 31,803,000 )

( 27,288,000 )

( 57,402,000 )

(Loss) income before income taxes

( 4,664,000 )

Income tax provision (benefit)

Net loss from continuing operations

( 31,855,000 )

( 26,723,000 )

( 57,449,000 )

( 135,146,000 )

Net gain (loss) from discontinued operations

( 1,359,000 )

( 4,658,000 )

( 29,639,000 )

( 28,082,000 )

( 58,228,000 )

Net (loss) income from continuing operations

( 4,723,000 )

Net loss attributable to non-controlling interest

Net loss attributable to Hyperscale Data, Inc.

Net loss from discontinued operations

( 3,336,000 )

Net (loss) income

( 4,723,000 )

Net loss (income) attributable to non-controlling interest

( 7,135,000 )

Net (loss) income attributable to Hyperscale Data, Inc.

( 4,205,000 )

2 unchanged sentences

( 1,260,000 )

Net loss available to common stockholders

$ ( 26,875,000 )

$ ( 22,183,000 )

$ ( 59,653,000 )

Net (loss) income available to common stockholders

$ ( 6,171,000 )

Basic and diluted net gain (loss) per common share:

Basic net (loss) income per common share:

Continuing operations

$ ( 1,201.94 )

Discontinued operations

Net loss per common share

$ ( 1,245.88 )

Weighted average basic and diluted common shares outstanding

Comprehensive loss

Net loss available to common stockholders

$ ( 26,875,000 )

$ ( 22,183,000 )

$ ( 59,653,000 )

Net (loss) income per common share

Diluted net (loss) income per common share:

Continuing operations

Discontinued operations

Net (loss) income per common share

Weighted average common shares outstanding:

Comprehensive (loss) income

Net (loss) income available to common stockholders

$ ( 6,171,000 )

Foreign currency translation adjustment

Other comprehensive loss

Total comprehensive loss

$ ( 27,096,000 )

$ ( 22,465,000 )

$ ( 60,274,000 )

Other comprehensive income

Total comprehensive (loss) income

$ ( 6,165,000 )

5 unchanged sentences

IN STOCKHOLDERS’ EQUITY

Three Months Ended September 30, 2024

A Common Stock

Three Months Ended March 31, 2025

Class A Common

Class B Common

Comprehensive

Stockholders’

BALANCES, July 1, 2024

BALANCES, January 1, 2025

$ 668,817,000

3 unchanged sentences

$ ( 30,571,000 )

Issuance of Series C preferred stock, related party

Fair value of warrants issued in connection with

Series C preferred stock,

related party

Issuance of Series G preferred stock, related party

Fair value of warrants issued in connection with Series

G preferred stock, related party

Issuance of Series D preferred stock for cash

Class B common stock dividend

Stock-based compensation

Issuance of Class A common stock for conversion

Distribution to Circle 8 Crane Services, LLC

(“Circle 8”) non-controlling

Net loss attributable to Hyperscale Data, Inc.

Issuance of Class A common stock for conversion of

Net loss attributable to Hyperscale Data

( 4,205,000 )

5 unchanged sentences

Series D preferred dividends ($1.06 per share)

Foreign currency translation adjustments

Net loss attributable to non-controlling interest

( 2,861,000 )

Deconsolidation of subsidiary

BALANCES, September 30, 2024

$ 661,606,000

$ ( 627,124,000 )

$ ( 1,222,000 )

$ ( 483,000 )

$ ( 30,571,000 )

The accompanying notes are an integral part of

these unaudited condensed consolidated financial statements.

HYPERSCALE DATA, INC.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES

IN STOCKHOLDERS’ EQUITY

Three Months Ended September 30, 2023

A Common Stock

Comprehensive

Stockholders’

BALANCES, July 1, 2023

$ 573,388,000

$ ( 444,371,000 )

$ ( 1,450,000 )

$ ( 29,919,000 )

$ 121,501,000

Stock-based compensation

Issuance of common stock for cash

Financing cost in connection with sales of common stock

Issuance of common stock for conversion of preferred stock liabilities

Common stock issued in connection with issuance of notes payable

Remeasurement of Ault Disruptive subsidiary temporary equity

Increase in ownership interest of subsidiary

Sale of subsidiary stock to non-controlling interests

Purchase of treasury stock - Ault Alpha LP (“Ault Alpha”)

Net loss attributable to Hyperscale Data, Inc.

( 21,771,000 )

Series E preferred dividends ($0.57 per share)

Retirement of treasury stock

( 30,571,000 )

Series A preferred dividends ($0.63 per share)

Series D preferred dividends ($0.81 per share)

Foreign currency translation adjustments

Net loss attributable to non-controlling interest

( 6,668,000 )

Distribution of securities of TurnOnGreen, Inc.

(“TurnOnGreen”)

to Hyperscale Data Class A common stockholders ($36.00 per share)

( 5,500,000 )

BALANCES, September 30, 2023

$ 589,291,000

$ ( 467,088,000 )

$ ( 2,102,000 )

Deconsolidation of subsidiary

BALANCES, March 31, 2025

$ 672,082,000

6 unchanged sentences

IN STOCKHOLDERS’ EQUITY

Nine Months Ended September 30, 2024

Three Months Ended March 31, 2024

A Common Stock

Comprehensive

Non-Controlling

Stockholders’

4 unchanged sentences

$ ( 30,571,000 )

Issuance of Series C preferred stock, related party

Fair value of warrants issued in connection with

Series C preferred stock,

Issuance of Series C preferred stock, related party for cash

Fair value of warrants issued in connection with Series C preferred stock,

related party

1 unchanged sentence

Issuance of Class A common stock for cash

Financing cost in connection with sales of Class A

Issuance of Class A common stock for conversion of

Increase in ownership interest of subsidiary

Financing cost in connection with sales of Class A common stock

Sale of subsidiary stock to non-controlling interests

Distribution to Circle 8 non-controlling interest

Distribution to Circle 8 Crane Services, LLC (“Circle 8”) non-controlling

Conversion of RiskOn International Inc.

Net loss attributable to Hyperscale Data, Inc.

( 55,759,000 )

(“ROI”) convertible

Net income attributable to Hyperscale Data

Series A preferred dividends ($0.63 per share)

Series C preferred dividends ($25.53 per share)

( 3,091,000 )

Series D preferred dividends ($0.81 per share)

Foreign currency translation adjustments

Net loss attributable to non-controlling interest

( 2,469,000 )

Distribution of securities of TurnOnGreen to

Hyperscale Data Class A common

($2.02 per share)

( 4,900,000 )

Distribution of ROI investment in White River

River”) to ROI shareholders

( 19,210,000 )

Deconsolidation of subsidiary

BALANCES, September 30, 2024

$ 661,606,000

$ ( 627,124,000 )

$ ( 1,222,000 )

$ ( 483,000 )

$ ( 30,571,000 )

The accompanying notes are an integral part of

these unaudited condensed consolidated financial statements.

HYPERSCALE DATA, INC.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES

IN STOCKHOLDERS’ EQUITY

Nine Months Ended September 30, 2023

A Common Stock

Comprehensive

Stockholders’

BALANCES, January 1, 2023

$ 565,905,000

$ ( 329,078,000 )

$ ( 1,100,000 )

$ ( 29,235,000 )

$ 223,988,000

Issuance of Class A common stock for restricted stock awards

Series D preferred stock issued for cash

Preferred stock offering costs

( 3,431,000 )

Stock-based compensation

Issuance of Class A common stock for cash

Financing cost in connection with sales of Class A common stock

Issuance of Class A common stock for conversion of preferred stock

Class A common stock issued in connection with issuance of notes payable

Remeasurement of Ault Disruptive subsidiary temporary equity

( 5,945,000 )

Increase in ownership interest of subsidiary

( 1,597,000 )

( 1,584,000 )

Non-controlling position at ROI subsidiary acquired

Sale of subsidiary stock to non-controlling interests

Distribution to Circle 8 non-controlling interest

Purchase of treasury stock - Ault Alpha

( 1,306,000 )

Net loss attributable to Hyperscale Data, Inc.

( 131,100,000 )

Series A preferred dividends ($1.25 per share)

Series D preferred dividends ($1.62 per share)

Foreign currency translation adjustments

( 1,001,000 )

Net loss attributable to non-controlling interest

( 10,420,000 )

Net income attributable to non-controlling interest

Distribution of securities of TurnOnGreen, Inc.

(“TurnOnGreen”)

to Hyperscale Data Class A common stockholders ($5.70 per share)

( 4,900,000 )

Distribution of securities of TurnOnGreen to Hyperscale Data Class

A common stockholders ($50.50 per share)

Distribution of ROI investment in White River Energy Corp.

River”) to ROI stockholders

( 19,210,000 )

BALANCES, September 30, 2023

( 19,210,000 )

Net loss attributable to non-controlling interest of deconsolidated subsidiary

BALANCES, March 31, 2024

$ 656,616,000

7 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Nine Months Ended September 30,

For the Three Months Ended March 31,

Cash flows from operating activities:

$ ( 58,228,000 )

Net (loss) income

$ ( 4,723,000 )

1 unchanged sentence

( 3,336,000 )

Net loss from continuing operations

( 57,449,000 )

Net (loss) income from continuing operations

( 4,723,000 )

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

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

Depreciation and amortization

1 unchanged sentence

Amortization of right-of-use assets

Impairment of goodwill and intangible assets

Stock-based compensation

Gain on the sale of fixed assets

( 2,728,000 )

Impairment of property and equipment

Impairment of equity securities

Impairment of crypto assets

Realized gain on the sale of crypto assets

Losses (gains) on the sale of fixed assets

Realized losses (gains) on the sale of crypto assets

Change in fair value of crypto assets

2 unchanged sentences

( 8,862,000 )

Proceeds from the sale of crypto assets

Realized gains on sale of marketable securities

( 17,900,000 )

( 33,140,000 )

Gain on conversion of investment in equity securities to marketable equity securities

( 17,900,000 )

Unrealized gains on marketable securities

Unrealized losses (gains) on marketable securities

( 8,899,000 )

Realized losses on non-marketable equity securities

Unrealized losses on investments in common stock, related parties

Unrealized losses (gains) on investments in common stock, related parties

Income from cash held in trust

( 2,561,000 )

Loss from investment in unconsolidated entity

Provision for loan losses

Provision for loan losses, related party

Change in the fair value of warrant liability

Loss (gain) on extinguishment of debt

( 1,405,000 )

Gain on extinguishment of debt

Proceeds from the sale of crypto assets

Gain on deconsolidation of subsidiary

( 10,049,000 )

( 1,196,000 )

Changes in operating assets and liabilities:

2 unchanged sentences

( 3,021,000 )

( 1,554,000 )

Prepaid expenses and other current assets

( 3,026,000 )

( 4,023,000 )

Accounts payable and accrued expenses

Lease liabilities

( 7,577,000 )

Lease liabilities

Net cash used in operating activities from continuing operations

( 3,959,000 )

Net cash (used in) provided by operating activities from continuing operations

( 9,630,000 )

Net cash used in operating activities from discontinued operations

( 6,366,000 )

( 4,734,000 )

Net cash used in operating activities

5 unchanged sentences

( 1,420,000 )

Acquisition of non-controlling interests

( 1,584,000 )

Cash decrease upon deconsolidation of subsidiary

Investments in loans receivable

Investments in non-marketable equity securities

( 10,702,000 )

Proceeds from the sale of fixed assets

Investment in notes receivable, related party

( 3,413,000 )

Payments (proceeds) from notes receivable, related party

( 1,472,000 )

2 unchanged sentences

( 3,151,000 )

Net cash (used in) provided by investing activities from discontinued operations

( 3,799,000 )

Net cash provided by investing activities from discontinued operations

Net cash used in investing activities

1 unchanged sentence

( 1,730,000 )

The accompanying notes are an integral part of

these unaudited condensed consolidated financial statements.

HYPERSCALE DATA, INC.

1 unchanged sentence

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Nine Months Ended September 30,

For the Three Months Ended March 31,

Cash flows from financing activities:

2 unchanged sentences

Proceeds from sales of Series D preferred stock

Financing cost in connection with sales of Series D preferred stock

( 3,431,000 )

Proceeds from sales of Series C preferred stock and warrants, related party

Proceeds from sales of Series G preferred stock and warrants, related party

Proceeds from subsidiaries’ sale of stock to non-controlling interests

1 unchanged sentence

Proceeds from notes payable

Repayment of margin accounts

Payments on notes payable

2 unchanged sentences

Payments on convertible notes payable, related party

Payments on notes payable, related party

Proceeds (payments) on notes payable, related party

( 1,894,000 )

1 unchanged sentence

( 1,966,000 )

Purchase of treasury stock

( 1,260,000 )

3 unchanged sentences

Net cash provided by financing activities from continuing operations

Net cash provided by financing activities from discontinued operations

Net cash used in financing activities from discontinued operations

Net cash provided by financing activities

Effect of exchange rate changes on cash and cash equivalents

Net increase (decrease) in cash and cash equivalents and restricted cash

( 1,565,000 )

Effect of exchange rate changes on cash and cash equivalents from continuing operations

Net (decrease) increase in cash and cash equivalents and restricted cash

Cash and cash equivalents and restricted cash at beginning of period - continuing operations

3 unchanged sentences

Less cash and cash equivalents and restricted cash of discontinued operations at end of period

( 4,664,000 )

Cash and cash equivalents and restricted cash of continued operations at end of period

7 unchanged sentences

Conversion of convertible notes payable into shares of Class A common stock

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

Conversion of debt and equity securities to marketable securities

Conversion of loans receivable to marketable securities

Exchange of related party advances for investment in other equity securities, related party

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

Remeasurement of Ault Disruptive temporary equity

Preferred stock exchanged for notes payable

Remeasurement of Ault Disruptive Technologies Corporation temporary equity

Notes payable exchanged for convertible notes payable

Notes payable exchanged for notes payable, related party

Dividend of ROI investment in White River to ROI shareholders

Redeemable non-controlling interests in equity of subsidiaries paid with cash and marketable securities held in trust account

$ 120,064,000

Dividend paid in TurnOnGreen common stock in additional paid-in capital

The accompanying notes are an integral part of

these unaudited condensed consolidated financial statements.

DESCRIPTION OF BUSINESS

(f/k/a Ault Alliance, Inc.), a Delaware corporation (“Hyperscale Data” or the “Company”) is a diversified

holding company pursuing growth by acquiring and developing undervalued businesses and disruptive technologies with a global impact.

its wholly- and majority-owned subsidiaries and strategic investments, the Company owns and operates a data center at which it mines Bitcoin

and offers colocation and hosting services for the emerging artificial intelligence ecosystems and other industries, and provides mission-critical

products that support a diverse range of industries, including a metaverse platform, oil exploration, crane services, defense/aerospace,

industrial, automotive, medical/biopharma and hotel operations.

In addition, the Company extends credit to select entrepreneurial businesses

through a licensed lending subsidiary.

Company has the following reportable segments:

· Energy and Infrastructure (“Energy”) – crane operations

and oil exploration;

· Technology and Finance (“Fintech”) – commercial lending, activist investing, and stock

Hyperscale Data, Inc., a Delaware

corporation (“Hyperscale Data” or the “Company”) is a diversified holding company pursuing growth by acquiring

and developing undervalued businesses and disruptive technologies with a global impact.

Through its wholly and majority-owned subsidiaries

and strategic investments, the Company owns and/or operates data centers at which it mines Bitcoin and offers colocation and hosting services

for the emerging artificial intelligence (“AI”) ecosystems and other industries, and provides products and services that support

a diverse range of industries, including crane rental services, hotel operations, defense, industrial, an AI software platform and a social

gaming platform.

In addition, the Company extends credit to select entrepreneurial businesses through a licensed lending subsidiary.

The Company has the following

reportable segments:

• Energy and Infrastructure (“Energy”)

– crane operations;

• Technology and Finance (“Fintech”)

– commercial lending, activist investing, and stock trading;

• Sentinum, Inc.

(“Sentinum”) – crypto assets mining operations and colocation and hosting

services for the emerging artificial intelligence ecosystems and other industries;

· TurnOnGreen – electric vehicle electrification infrastructure and commercial electronics solutions;

· ROI – immersive metaverse platform, media, and digital learning;

(“Sentinum”) –

crypto assets mining operations and colocation and hosting services for the emerging artificial intelligence ecosystems and other industries;

• TurnOnGreen – commercial electronics solutions;

• ROI – AI software platform and a social

gaming platform;

• Ault Global Real Estate Equities, Inc.

(“AGREE”) – hotel operations and other commercial

real estate holdings.

Company had a change to its reportable segments due to the discontinued operations of its majority

owned subsidiary, Gresham Worldwide, Inc.

See Note 4 below.

September 10, 2024, the Company changed its name from Ault Alliance, Inc.

to Hyperscale Data, Inc.

and its Class A common stock ticker

symbol was changed to “GPUS.” The name change did not affect the rights of security holders of the Company.

– hotel operations and other commercial real estate holdings.

LIQUIDITY AND FINANCIAL

As of September 30, 2024, the

Company had cash and cash equivalents of $ 7.2 million (excluding restricted cash of $ 8.3 million), negative working capital of $ 151.5 million

and a history of net operating losses.

The Company has financed its operations principally through issuances of convertible debt, promissory

notes and equity securities.

These factors create substantial doubt about the Company’s ability to continue as a going concern

for at least one year after the date that these condensed consolidated financial statements are issued.

of March 31, 2025, the Company had cash and cash equivalents of $ 4.2 million (excluding restricted cash of $ 20.4 million), negative

working capital of $ 149.1 million and a history of net operating losses.

The Company has financed its operations principally through

issuances of convertible debt, promissory notes and equity securities.

These factors create substantial doubt about the Company’s

ability to continue as a going concern for at least one year after the date that these condensed consolidated financial statements are

The condensed consolidated

financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

the condensed consolidated financial statements have been prepared on a basis that assumes the Company will continue as a going concern

and which contemplates the realization of assets and satisfaction of liabilities and commitments in the ordinary course of business.

the condensed consolidated financial statements have been prepared based on the assumption that the Company will continue as a going concern

and that contemplates the realization of assets and satisfaction of liabilities and commitments in the ordinary course of business.

In making this assessment

5 unchanged sentences

Management expects that the

Company’s existing cash and cash equivalents, accounts receivable and marketable securities as of September 30, 2024, will not be

sufficient to enable the Company to fund its anticipated level of operations through one year from the date these financial statements

Management anticipates raising additional capital through the private and public sales of the Company’s equity or debt

securities and selling its marketable securities as well as crypto assets, or a combination thereof.

Although management believes that

such capital sources will be available, there can be no assurances that financing will be available to the Company when needed in order

to allow the Company to continue its operations, or if available, on terms acceptable to the Company.

If the Company does not raise sufficient

capital in a timely manner, among other things, the Company may be forced to scale back or cease its operations altogether.

Company’s existing cash and cash equivalents, accounts receivable and marketable securities as of March 31, 2025, will not be sufficient

to enable the Company to fund its anticipated level of operations through one year from the date these financial statements are issued.

Management anticipates raising additional capital through the private and public sales of the Company’s equity or debt securities

and selling its crypto assets, or a combination thereof.

Although management believes that such capital sources will be available, there

can be no assurances that financing will be available to the Company when needed in order to allow the Company to continue its operations,

or if available, on terms acceptable to the Company.

If the Company does not raise sufficient capital in a timely manner, among other

things, the Company may be forced to curtail or cease its operations altogether.

OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

9 unchanged sentences

condensed consolidated financial statements should be read in conjunction with the consolidated financial statements in the Company’s

Annual Report on Form 10-K/A for the year ended December 31, 2023 (the “2023 Annual Report”) as amended, filed with the Securities

and Exchange Commission (the “SEC”) on September 24, 2024.

Annual Report on Form 10-K for the year ended December 31, 2024 (the “2024 Annual Report”) as amended, filed with the Securities

and Exchange Commission (the “SEC”) on April 15, 2025.

The condensed consolidated balance sheet as of December 31, 2024

was derived from the Company’s audited 2024 financial statements contained in the above referenced 2024 Annual Report.

of the three and nine months ended September 30, 2024, are not necessarily indicative of the results to be expected for the full year

ending December 31, 2024.

the three months ended March 31, 2025, are not necessarily indicative of the results to be expected for the full year ending December 31,

Period Revision - Statement of Cash Flows

the nine months ended September 30, 2024, the Company disclosed the borrowings of lines of credit and repayments of lines of credit as

separate line items within notes payable activity of the financing activities section of the consolidated statement of cash flows.

Company has corrected these line items for the nine months ended September 30, 2023 for comparability purposes.

the three months ended March 31, 2025, the Company disclosed the borrowings of lines of credit and repayments of lines of credit as separate

line items within notes payable activity of the financing activities section of the consolidated statement of cash flows.

has corrected these line items for the three months ended March 31, 2024 for comparability purposes.

Significant Accounting

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

the 2023 Annual Report.

Revenue Recognition 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 Accounting Standards Codification (“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

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.

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 nine months ended September 30, 2024.

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 non-cash consideration in the form of a block reward is based on the total blocks expected to be generated

on the Bitcoin network for the daily 24-hour period beginning midnight UTC and ending 23:59:59 UTC in accordance with the following formula:

the daily hash calculations that the Company provided to the pool operator as a percent of the Bitcoin network’s implied hash calculations

as determined by the network difficulty, multiplied by the total Bitcoin network block rewards expected to be generated for the same daily

· The non-cash consideration in the form of transaction fees paid by transaction requestors is based on

the share of standard transaction fees over the daily 24-hour period beginning midnight UTC and ending 23:59:59 UTC.

The pool operator

calculates the standard transaction fee during the 24-hour period using a rolling 144 block moving average of actual transaction fees.

· The block reward and transaction fees earned by the Company are reduced by mining pool fees charged by

the operator for operating the pool based on a rate schedule per the mining pool contract.

The mining pool fee is only incurred to the

extent the Company performs hash calculations and generates revenue in accordance with the pool operator’s payout formula during

the same 24-hour period beginning midnight UTC daily.

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.

Revenue Recognition

Hotel Operations

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

revenue represents revenue from the occupancy of the Company’s hotel rooms, which is driven by the occupancy and average daily rate

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.

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.

have been no material changes to the Company’s significant accounting policies previously disclosed in the 2024 Annual Report.

Reclassifications

prior period amounts have been reclassified for comparative purposes to conform to the current-period financial statement presentation,

including the discontinued operations presentation of GIGA financial results.

These reclassifications had no effect on previously reported

results of operations.

Issued Accounting Standards

including the discontinued operations presentation of Gresham Worldwide, Inc.

(“GIGA”) and AGREE financial results.

reclassifications had no effect on previously reported results of operations.

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 any required changes to its condensed consolidated

financial statements.

On December 14, 2023, the

Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No.

2023-09, Income

Taxes (Topic 740):

2023-09, Income Taxes

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

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 will adopt ASU 2023-09 as

required for the year ending December 31, 2025.

The Company is currently evaluating the impact of the new requirement for its income tax

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 fiscal year beginning January 1, 2025, with early adoption permitted.

The Company is currently evaluating the impact of

adopting the standard.

On November 27, 2023, the

FASB issued ASU No.

2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures (“ASU 2023-07”).

ASU 2023-07 is designed to improve the reportable segment disclosure requirements, primarily through enhanced disclosures about significant

segment expenses that are regularly provided to the chief operating decision maker.

The new standard is effective for the Company for

its fiscal year beginning January 1, 2025, with early adoption permitted.

The Company is currently evaluating the impact of adopting the

In March 2024, the FASB issued

2024-01 Compensation - Stock Compensation (Topic 718):

Scope Application of Profits Interest and Similar Awards (“ASU

ASU 2024-01 improves clarity and operability without changing the guidance.

ASU 2024-01 is effective on a prospective

basis, with the option for retrospective application, for annual periods beginning after December 15, 2024 and early adoption is permitted.

The Company does not expect the adoption of ASU 2024-01 to have a material impact on its consolidated financial statements.

DECONSOLIDATION OF SUBSIDIARY AND DISCONTINUED

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 the standard.

DECONSOLIDATION OF SUBSIDIARIES AND

GIGA DISCONTINUED OPERATIONS

Deconsolidation of Avalanche International

March 28, 2025, AVLP, 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 condensed consolidated statement of operations

for the three months ended March 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.

Presentation of GIGA as Discontinued Operations

August 14, 2024, GIGA, filed

a petition for reorganization under Chapter 11 of the bankruptcy laws.

The filing placed GIGA under the control of the bankruptcy court,

which oversees its reorganization and restructuring process.

The Company assessed the inherent uncertainties associated with the outcome

of the Chapter 11 reorganization process and the anticipated duration thereof, and concluded that it was appropriate to deconsolidate

GIGA and its subsidiaries effective on the petition date.

The Company recognized a gain on deconsolidation of GIGA of $ 2.0 million included in net gain (loss) from discontinued operations.

In connection with the Chapter

11 reorganization process , the Company concluded that the operations of GIGA met the criteria for discontinued operations as this

strategic shift that will have a significant effect on the Company’s operations and financial results.

As a result, the Company

has presented the results of operations, cash flows and financial position of GIGA as discontinued operations in the accompanying consolidated

financial statements and notes for all periods presented.

The following table presents

the assets and liabilities of GIGA operations:

Schedule of presents

the assets and liabilities

September 30,

Cash and cash equivalents

Restricted cash

Accounts receivable

Prepaid expenses and other current assets

Intangible assets, net

Property and equipment, net - current

Right-of-use assets

Total assets discontinued operations

Accounts payable and accrued expenses

Operating lease liability

Notes payable

Convertible notes payable

Liabilities discontinued operations

Net assets of discontinued operations

Net assets of discontinued

operations excludes $ 14.0 million of intercompany notes payable to Hyperscale Data and Ault lending as of December 31, 2024.

August 14, 2024, GIGA filed a petition for reorganization under Chapter 11 of the bankruptcy laws.

The filing placed GIGA under the control

of the bankruptcy court, which oversees its reorganization and restructuring process.

The Company assessed the inherent uncertainties

associated with the outcome of the Chapter 11 reorganization process and the anticipated duration thereof, and concluded that it was appropriate

to deconsolidate GIGA and its subsidiaries effective on the petition date.

In connection

with the Chapter 11 reorganization process, the Company concluded that the operations of GIGA met the criteria for discontinued operations

as this strategic shift that will have a significant effect on the Company’s operations and financial results.

As a result, the

Company has presented the results of operations, cash flows and financial position of GIGA as discontinued operations in the accompanying

consolidated financial statements and notes for all periods presented.

The following table presents

2 unchanged sentences

For the Three Months Ended

For the Nine Months Ended

September 30,

Revenue, products

7 unchanged sentences

( 3,478,000 )

( 4,293,000 )

( 5,620,000 )

Other income (expense):

1 unchanged sentence

Interest expense

( 1,662,000 )

Change in fair value of warrant liability

( 1,061,000 )

Total other income (expense), net

( 1,213,000 )

Loss before income taxes

( 4,270,000 )

( 4,361,000 )

( 6,385,000 )

Income tax benefit

( 4,227,000 )

( 4,346,000 )

( 6,374,000 )

Net loss attributable to non-controlling interest

Net income (loss) available to common stockholders

$ ( 1,359,000 )

$ ( 2,792,000 )

$ ( 4,658,000 )

The net gain (loss) from discontinued

operations for the three and nine months ended September 30, 2024 on the condensed consolidated statement of operations and comprehensive

loss includes the gain on deconsolidation as follows:

Schedule of gain on deconsolidation

For the Three

September 30, 2024

GIGA net income (loss)

$ ( 2,792,000 )

Gain on deconsolidation

Net gain (loss) from discontinued operations

Net loss available to common stockholders

$ ( 3,336,000 )

2 unchanged sentences

Schedule of statement of cash flows

For the Nine Months Ended September 30,

For the Three Months Ended March 31,

Cash flows from operating activities:

$ ( 4,227,000 )

$ ( 6,374,000 )

Adjustments to reconcile net loss to net cash provided by operating activities:

5 unchanged sentences

Accounts receivable

( 1,638,000 )

Prepaid expenses and other current assets

( 1,516,000 )

Lease liabilities

1 unchanged sentence

Net cash used in operating activities

( 6,366,000 )

( 4,734,000 )

Cash flows from investing activities:

Purchase of property and equipment

Cash decrease upon deconsolidation

( 3,550,000 )

Net cash used in investing activities

( 3,799,000 )

Cash flows from financing activities:

Proceeds from notes payable

Payments on notes payable

Cash contributions from parent

2 unchanged sentences

Net increase in cash and cash equivalents and restricted cash

( 4,301,000 )

Cash and cash equivalents and restricted cash at beginning of period

8 unchanged sentences

value at the date of the not to sell.

For presentation purposes,

the assets and liabilities previously held for sale as of December 31, 2023, were reclassified in the December 31, 2023 balance sheet

For presentation purposes, the assets and liabilities previously held for sale were reclassified

in the accompanying financial statements back to their original asset and liability groups at their previous carrying values.

In connection

with this change in plan of sale, 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 nine months ended September 30, 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.

REVENUE DISAGGREGATION

The following tables summarize

disaggregated customer contract revenues and the source of the revenue for the three months ended September 30, 2024 and 2023.

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, 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.

Co.” column includes revenue that is not allocated to a specific reportable segment but is generated within the holding company

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 three months ended September 30, 2024:

revenues consisted of the following for the three months ended March 31, 2025:

Schedule of disaggregated revenues

Primary Geographical Markets

North America

Middle East and other

Revenue from contracts with customers

Revenue, lending and trading activities (North America)

Primary Geographical

Middle East and

contracts with customers

Revenue, lending

and trading activities (North America)

Total revenue

Major Goods or Services

Power supply units and systems

Revenue from mined crypto assets at Sentinum owned and operated facilities

Revenue from Sentinum crypto mining equipment hosted at third-party facilities

Hotel and real estate operations

Revenue from contracts with customers

Revenue, lending and trading activities

units and systems

mined crypto assets at Sentinum owned and

operated facilities

Hotel and real

estate operations

contracts with customers

Revenue, lending

and trading activities

Total revenue

Timing of Revenue Recognition

Goods and services transferred at a point in time

Services transferred over time

Revenue from contracts with customers

Goods and services

transferred at a point in time

Services transferred

contracts with customers

The Company’s disaggregated

revenues consisted of the following for the nine months ended September 30, 2024:

revenues consisted of the following for the three months ended March 31, 2024:

Primary Geographical Markets

2 unchanged sentences

Revenue from contracts with customers

Revenue, lending and trading activities (North America)

Revenue, lending and trading

activities (North America)

Total revenue

1 unchanged sentence

Power supply units and systems

Revenue from mined crypto assets at Sentinum owned and operated facilities

Revenue from mined crypto assets at Sentinum owned

operated facilities

Revenue from Sentinum crypto mining equipment hosted at third-party facilities

1 unchanged sentence

Revenue from contracts with customers

Revenue, lending and trading activities

Revenue, lending and trading

Total revenue

2 unchanged sentences

Services transferred over time

Revenue from contracts with customers

The Company’s disaggregated

revenues consisted of the following for the three months ended September 30, 2023:

Primary Geographical Markets

North America

Middle East and other

Revenue from contracts with customers

Revenue, lending and trading activities (North America)

Total revenue

$ ( 249,000 )

Major Goods or Services

Power supply units & systems

Revenue from mined crypto assets at Sentinum owned and operated facilities

Revenue from Sentinum crypto mining equipment hosted at third-party facilities

Hotel and real estate operations

Karaoke machines and related consumer goods

Revenue from contracts with customers

Revenue, lending and trading activities

Total revenue

$ ( 249,000 )

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 nine months ended September 30, 2023:

Primary Geographical Markets

North America

Middle East and other

Revenue from contracts with customers

Revenue, lending and trading activities (North America)

Total revenue

$ 104,238,000

Major Goods or Services

Power supply units & systems

Revenue from mined crypto assets at Sentinum owned and operated facilities

Revenue from Sentinum crypto mining equipment hosted at third-party facilities

Hotel and real estate operations

Karaoke machines and related consumer goods

Revenue from contracts with customers

Revenue, lending and trading activities

Total revenue

$ 104,238,000

Timing of Revenue Recognition

Goods transferred at a point in time

Services transferred over time

Revenue from contracts with customers

Revenue from contracts with

FAIR VALUE OF FINANCIAL

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:

the fair value hierarchy at March 31, 2025 (no material financial instruments that were measured at fair value on a recurring basis at

December 31, 2024):

Fair value, assets measured on recurring basis

Fair Value Measurement at September 30, 2024

Investment in common stock of Alzamend Neuro, Inc.

(“Alzamend”) – a related party

Investments in marketable equity securities

Crypto assets

Total assets measured at fair value

Warrant and embedded conversion feature liabilities

Total liabilities measured at fair value

Fair Value Measurement at December 31, 2023

Investment in common stock of Alzamend – a related party

Investments in marketable equity securities

Cash and marketable securities held in trust account

Total assets measured at fair value

Warrant and embedded conversion feature liabilities

Total liabilities measured at fair value

Fair Value Measurement at March 31, 2025

Embedded conversion feature liabilities

The Company assesses the inputs

6 unchanged sentences

The changes in Level 3 fair

value hierarchy during the three and nine months ended September 30, 2024 and 2023 were as follows:

value hierarchy during the three months ended March 31, 2025 and 2024 were as follows:

Schedule of changes in fair value hierarchy

2 unchanged sentences

End of Period

Nine months ended September 30, 2024

Warrant liabilities

Embedded conversion feature liabilities

$ ( 910,000 )

Nine months ended September 30, 2023

Warrant liabilities

$ ( 4,981,000 )

Three months ended March 31, 2025

Embedded conversion feature liabilities

$ ( 3,439,000 )

Level 3 Balance at

1 unchanged sentence

End of Period

Three months ended September 30, 2024

Warrant liabilities

$ ( 570,000 )

Embedded conversion feature liabilities

$ ( 155,000 )

Three months ended September 30, 2023

Three months ended March 31, 2024

Warrant liabilities

2 unchanged sentences

$ ( 755,000 )

Equity Investments for Which Measurement Alternative Has Been Selected

of September 30, 2024 and December 31, 2023, the Company held equity investments in other securities valued at $ 5.3 million and $ 21.8 million,

respectively, that were valued using a measurement alternative.

These investments are included in other equity securities in the accompanying

consolidated balance sheets.

Company has made cumulative downward adjustments for impairments for equity securities that do not have readily determinable fair values

for the nine months ended September 30, 2024 and 2023, totaling $ 6.3 million and $ 11.6 million, respectively.

Approximately $ 6.3 million

of the impairment charge for the nine months ended September 30, 2024 was reflected in other income (expense) on the condensed consolidated

statement of operations and comprehensive loss.

Approximately $ 9.6 million of the impairment charge for the nine months ended September

30, 2023 was reflected in other income (expense) and $2.0 million of the impairment charge related to Fintech lending operations and was

recorded against revenue from lending and trading activities on the condensed consolidated statement of operations and comprehensive loss.

Marketable EQUITY Securities

Marketable equity securities

with readily determinable market prices consisted of the following as of September 30, 2024 and December 31, 2023:

Schedule of marketable securities

Marketable equity securities at September 30, 2024

Gross unrealized

Common shares

$ ( 5,461,000 )

Marketable equity securities at December 31, 2023

Gross unrealized

Common shares

$ ( 5,104,000 )

The Company’s investment

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

CRYPTO ASSETS

The following table presents

revenue from mined crypto assets for the three and nine months ended September 30, 2024 and 2023:

revenue from mined crypto assets for the three months ended March 31, 2025 and 2024:

Schedule of revenue from crypto assets

For the Three Months Ended

For the Nine Months Ended

September 30,

Revenue from mined crypto assets at Sentinum owned and operated facilities

2 unchanged sentences

The following table presents

the activities of the crypto assets (included in prepaid expenses and other current assets) for the nine months ended September 30, 2024

the activities of the crypto assets (included in prepaid expenses and other current assets) for the three months ended March 31, 2025

Schedule of activities of the crypto assets

For the Nine Months Ended

September 30,

For the Three Months Ended

Balance at January 1

6 unchanged sentences

Payment of interest payable with crypto assets

Realized gain on sale of crypto assets

Unrealized gain on crypto assets

Impairment of mined crypto assets

Balance at September 30

Realized (losses) gains on sale of crypto assets

Unrealized (loss) gain on crypto assets

Balance at March 31

PROPERTY AND EQUIPMENT, NET

At September 30, 2024 and

December 31, 2023, property and equipment consisted of:

At March 31, 2025 and December

31, 2024, property and equipment consisted of:

Schedule of property and equipment

September 30, 2024

March 31, 2025

December 31, 2024

Building, land and improvements

$ 100,184,000

Crypto assets mining equipment

10 unchanged sentences

Schedule of depreciation

For the Three Months Ended

For the Nine Months Ended

September 30,

For the Three Months Ended March 31,

Depreciation expense

Impairment of Property and Equipment

During the three months ended September 30, 2024, due to increases

in the Bitcoin mining difficulty level, which compounded the continued impact of the Bitcoin halving event, we concluded that indicated

that an impairment triggering event had occurred.

Testing performed indicated the estimated fair value of the Company’s miners to

be less than their net carrying value as of September 30, 2024, and an impairment charge of $ 10.5 million was recognized, decreasing the

net carrying value of 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.

In addition, the Company has

recorded $ 1.2 million and $ 9.2 million in impairment charges related to real estate assets of AGREE during the three and nine months ended

September 30, 2024, respectively.

INTANGIBLE ASSETS, NET

At September 30, 2024 and December 31,

At March 31, 2025 and December 31, 2024,

intangible assets consisted of:

Schedule of intangible asset

September 30, 2024

March 31, 2025

December 31, 2024

Definite lived intangible assets:

Developed technology

Customer list

Developed technology

Accumulated amortization

6 unchanged sentences

Schedule of amortization expense

For the Three Months Ended

For the Nine Months Ended

September 30,

For the Three Months Ended March 31,

Amortization expense

of September 30, 2024, intangible assets subject to amortization have an average remaining useful life of 6.9 years.

of March 31, 2025, intangible assets subject to amortization have an average remaining useful life of 6.6 years.

The following

3 unchanged sentences

INVESTMENTS – RELATED PARTIES

Investments in Alzamend, Ault & Company, Inc.

Company”) and GIGA at September 30, 2024 and December 31, 2023, were comprised of the following:

Investment in Promissory Notes, Related Parties – Ault &

Company and GIGA (Recorded in “Investment in Promissory Notes and Other, Related Party” on the Condensed Consolidated Balance

Investments in Alzamend Neuro,

(“Alzamend”), Ault & Company, Inc.

(“Ault & Company”) and GIGA at March 31, 2025 and December 31,

2024, were comprised of the following:

Investment in Promissory Notes, Related

Parties – Ault & Company and GIGA

Schedule of investment

September 30,

Promissory note, related party

December 31, 2024

10% Senior Secured Convertible Promissory Note - GIGA

December 31, 2024

12% Senior Secured Subordinated Convertible Promissory Note - GIGA

Promissory note and accrued interest receivable, Ault & Company, in default

December 31, 2024

12% Senior Secured Subordinated Convertible Promissory Note - GIGA

June 30, 2025

Debtor in possession Loan Agreement - GIGA

October 28, 2024

Accrued interest receivable GIGA

Accrued interest receivable Ault & Company

Promissory note and accrued interest receivable, GIGA

In bankruptcy

Allowance for credit losses

( 5,668,000 )

Total investment in promissory notes and other, related parties

2 unchanged sentences

Schedule of Interest income, related party

For the Three Months Ended

For the Nine Months Ended

September 30,

For the Three Months Ended March 31,

Interest income, related party

5 unchanged sentences

the collectability of certain notes receivables is doubtful based on information available.

Upon the deconsolidation of

the GIGA, the Company established an allowance for credit losses of $2.6 million related to notes receivable from GIGA included in net gain (loss) from discontinued operations.

During the three months ended

March 31, 2024, due to uncertainties surrounding collection, the Company recorded a loan loss reserve of $ 3.1 million related to

the promissory note from Ault & Company recorded in provision for loan losses, related party, reversed the related accrued receivable and did not record interest income on the note.

Investment in Alzamend Series B Convertible

Preferred Stock, Warrants and Common Stock, Related Parties – Alzamend (Recorded in “Investments in Common Stock and Equity

Securities, Related Party” on the Condensed Consolidated Balance Sheets)

Preferred Stock, Warrants and Common Stock, Related Parties – Alzamend

Schedule of investment in common stock

Investments in common stock, related parties at September 30, 2024

Investments in Common Stock, Related Parties at March 31, 2025

Gross Unrealized Losses

7 unchanged sentences

$ ( 24,607,000 )

Alzamend series B convertible preferred stock, warrants

$ ( 24,607,000 )

The following tables summarize

the changes in the Company’s investments in Alzamend common stock during the three and nine months ended September 30, 2024 and

the changes in the Company’s investments in Alzamend common stock during the three months ended March 31, 2025 and 2024:

Schedule of investment in warrants and common stock

For the Three Months Ended September 30,

Balance at July 1

Investment in common stock of Alzamend

Unrealized loss in common stock of Alzamend

( 3,124,000 )

Balance at September 30

For the Nine Months Ended September 30,

For the Three Months Ended March 31,

Balance at January 1

1 unchanged sentence

Unrealized loss in common stock of Alzamend

( 3,752,000 )

Balance at September 30

Balance at March 31

Ault Lending, LLC (“Ault Lending”)

1 unchanged sentence

Schedule of investment in warrants and preferred stock

September 30,

Investment in Alzamend preferred stock

1 unchanged sentence

In connection with a securities

purchase agreement entered into with Alzamend in January 2024, the Company purchased 2,100 shares of Alzamend Series B Convertible Preferred

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.

The Agreement provides that

Ault Lending may purchase up to $6 million of Alzamend Series B Convertible Preferred Stock in one or more closings.

There have been additional

closings subsequent to January 2024.

The Company has elected to

3 unchanged sentences

are each paid $ 50,000 annually by Alzamend.

EQUITY METHOD INVESTMENT

Equity Investments in Unconsolidated Entity

– Algorhythm Holdings, Inc.

(f/k/a The Singing Machine Company) (“SMC”)

The following table summarizes

the changes in the Company’s equity investments in an unconsolidated entity, SMC, included in other assets on the condensed consolidated

balance sheet, during the nine months ended September 30, 2024:

Schedule of equity investments in unconsolidated entity – SMC

Rollforward investment in unconsolidated entity

Beginning balance - January 1, 2024

Loss from investment in unconsolidated entity

( 1,957,000 )

Ending balance - September 30, 2024

There was no activity in the

investment in the unconsolidated entity account during the three months ended September 30, 2024, prior to the transition from the equity

method of accounting on September 5, 2024, as described below.

Consequently, the beginning balance, activity, and ending balance for this

period were all zero.

On September 5, 2024, three

of the Company’s employees resigned from the board of directors of SMC.

As a result of the resignations, and as the Company owned

less than 20% of SMC at the time, the Company no longer had the ability to exert significant influence over the operating and financial

policies of SMC.

The Company discontinued the equity method of accounting for the investment in SMC on September 5, 2024.

the Company changed its accounting for SMC to an investment in marketable equity securities and recognized the investment at fair value,

with a gain of $1.3 million recognized as revenue from lending and trading activities in the condensed consolidated statement of operations

and comprehensive loss.

ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Other current liabilities at September

Other current liabilities at March 31,

2025 and December 31, 2024 consisted of:

Schedule of other current liabilities

September 30,

Accounts payable

Accrued payroll and payroll taxes

Warrant liabilities

Interest payable

4 unchanged sentences

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.

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.

Transfers of White River Common Stock

In January of 2024, ROI announced

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.

In an effort to attempt to fulfill its original intent

to transfer the shares to ROI shareholders of record as of September 30, 2022, ROI would send such shareholders an agreement whereby qualified

shareholders can demonstrate to ROI’s satisfaction that they in fact were beneficial shareholders of ROI’s common or preferred

stock as of September 30, 2022 and affirm that they are “accredited investors” by July 26, 2024.

During the nine months ended

September 30, 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.

During the quarter ended March

31, 2024, ROI transferred 6.7 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, shares of ROI’s investment in White River’s Series A Convertible Preferred Stock were converted

into shares of White River common stock, resulting in a non-cash $ 17.9 million gain on conversion.

Ault Lending Transfer

On February 14, 2024, ROI

transferred 2.5 million shares of White River common stock with a carryover basis of $0.5 million and a fair value of $7.5 million on

the date of transfer to Ault Lending.

REDEEMABLE NONCONTROLLING INTERESTS IN

EQUITY OF SUBSIDIARY LIABILITY

The Company records redeemable

noncontrolling interests in equity of subsidiaries to reflect the economic interests of the common stockholders in Ault Disruptive.

Redemption of Shares

On September 27, 2024, Ault

Disruptive announced that it will redeem all of its outstanding shares of common stock which occurred as of the close of business on October

11, 2024, because Ault Disruptive would not consummate an initial business combination within the time period required by its Amended

and Restated Certificate of Incorporation, as amended.

During the nine months ended September 30, 2024, shares of Ault Disruptive common

stock were redeemed for an aggregate redemption amount of $ 1.5 million.

On October 11, 2024, all remaining

shares of Ault Disruptive common stock were redeemed for a redemption amount of $ 0.8 million.

The following table summarizes

the changes in the Company’s redeemable noncontrolling interests in equity of subsidiaries during the three months ended September

30, 2024 and 2023:

Redeemable noncontrolling interests in equity of subsidiary liability

For the Three Months Ended

September 30,

Redeemable noncontrolling interests in equity of subsidiaries as of July 1

Remeasurement of carrying value to redemption value

Redeemable noncontrolling interests in equity of subsidiaries as of September 30

The following table summarizes

the changes in the Company’s redeemable noncontrolling interests in equity of subsidiaries during the nine months ended September

30, 2024 and 2023:

For the Nine Months Ended

September 30,

Redeemable noncontrolling interests in equity of subsidiaries as of January 1

$ 117,993,000

Redemption of Ault Disruptive common stock

( 1,463,000 )

( 120,064,000 )

Remeasurement of carrying value to redemption value

Redeemable noncontrolling interests in equity of subsidiaries as of September 30

Merger Agreement

June 23, 2024, Ault Disruptive entered into a Merger Agreement with GIGA, intending for GIGA to become a majority owned subsidiary and

for Ault Disruptive to be renamed Gresham Worldwide, Inc., trading under the ticker “GWWI” on the NYSE American.

due to GIGA’s bankruptcy filing, the merger agreement was subsequently terminated.

August 14, 2024, GIGA filed a petition for reorganization under Chapter 11 of the bankruptcy laws.

to non-controlling interests, ROI converted a portion of their White River’s Series A Convertible Preferred Stock into common stock

and recorded a non-cash $ 17.9 million gain on conversion.

NOTES PAYABLE

Notes payable at September

Notes payable at March 31,

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

Schedule of notes payable

September 30,

AGREE secured construction loans

January 1, 2025

AGREE secured construction loans, in default

March 31, 2026

Circle 8 revolving credit facility

Circle 8 cranes with a book value of $29.6 million

Circle 8 cranes with a book

value of $29.3 million

December 16, 2025

16% promissory note (in default)

Ault & Company and Milton C.

(default rate of 24.0%)

July 15, 2024

Circle 8 equipment financing notes

Circle 8 equipment with a book value of $4.3 million

September 15, 2025 through June 15, 2027

15% term notes (in default as of November 1, 2024)

(default rate of 22.99%)

Circle 8 equipment with a

book value of $4.1 million

September 15, 2025

through June 15, 2027

15% term notes

October 31, 2024

8% demand loans

Sentinum note payable

ROI promissory note, in default

rate of 18.0%)

April 30, 2024

Other ($2.6 million in default)

Total notes payable

$ 104,796,000

Unamortized debt discounts

Total notes payable, net

$ 104,490,000

current portion

2 unchanged sentences

Notes payable – long-term portion

OID Only Term Note

2024, the Company entered into a term note agreement with institutional investors for the sale of up to $ 2.6 million in term notes, of

which the principal amount of $ 1.8 million was immediately funded.

A term note was issued at a discount, with net proceeds to the

Company of $ 1.5 million.

The term note does not accrue any interest.

The term note was scheduled to mature on August 2, 2024.

term note is guaranteed by Mr.

The term note maturity was extended to October 16, 2024 , and an extension fee of $ 0.2 million accrues

monthly until the term note is paid in full.

The term note is included in “Other” in the table above.

ROI 15% Term Note

9, 2024, ROI entered into a $ 1.77 million term note agreement with an institutional investor bearing interest of 15 % .

The term note was

issued at a discount, with net proceeds to ROI of $ 1.75 million.

The term note was scheduled to mature February 14, 2024.

This note has

been guaranteed by Ault & Company and Mr.

The term note was subsequently amended to increase the principal amount due to $ 2.1

million, increase the interest rate to 18 % and extend the maturity date to April 30, 2024 .

The term note is in default as of May 1, 2024.

15% Term Notes

Between April

29, 2024 and August 29, 2024, the Company entered into note agreements totaling $ 5.7 million with an institutional investor bearing interest

The term notes were issued at a discount, with net proceeds to the Company of $ 5.1 million.

The term notes were amended to

extend the maturity dates to October 31, 2024 .

The note is default as of November 1, 2024.

$20 Million Credit Agreement

2024 the Company entered into a Loan Agreement (the “Credit Agreement”) with two institutional investors (collectively, the

The Credit Agreement provides for an unsecured, non-revolving credit facility with an aggregate draw limit of $ 20.0

However, the Company is restricted to having no more than $ 2.0 million in principal amount of outstanding advances at any given

time under the Credit Agreement.

As of September 30, 2024, $ 2.0 million has been advanced, exclusive of a $ 0.4 million original issue

discount (“OID”).

under the Credit Agreement will be evidenced by a promissory note.

The Lender made an Advance to the Company of $1.5 million on the execution

The advances are due December 4, 2024 , provided, however, that if on such date, the Company has executed an equity line of credit

agreement relating to the sale of shares of the Company’s 13.00% Series D Cumulative Redeemable Perpetual Preferred Stock, has an

effective registration statement relating thereto and is not currently in default under such agreement, then the maturity date shall be

automatically extended until June 4, 2025.

The Lender is not obligated to make any further Advances under the Credit Agreement after the

maturity date.

Advances under the Credit Agreement will include the addition of an OID of 20 % to the amount of each Advance and all Advances

will bear interest at the rate of 15.0% per annum and may be repaid at any time without penalty or premium.

The obligations

of the Company under the Credit Agreement are secured by a guaranty provided by Milton C.

Ault, the Executive Chairman of the Company.

Circle 8 revolving credit facility

16, 2024, Circle 8 was in default related to reporting requirements under the terms of their revolving credit facility.

Circle 8 was able

to obtain a waiver on November 19, 2024 to cure the event of default.

Amendment to AGREE Secured Construction

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.

Notes Payable Maturities

The contractual maturities

of the Company’s notes payable, assuming the exercise of all extensions that are exercisable solely at the Company’s option,

as of September 30, 2024 were:

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

March 31, 2025 were:

Schedule of maturities

2025 (remainder)

$ 104,796,000

Interest Expense

Schedule of interest expense

For the Three Months Ended

For the Nine Months Ended

September 30,

For the Three Months Ended March 31,

Contractual interest expense

4 unchanged sentences

Notes payable, related party

at September 30, 2024 and December 31, 2023, were comprised of the following:

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

Schedule of notes payable, related party

Interest rate

September 30,

Notes from officers – Hyperscale Data

Notes from officers - TurnOnGreen

Notes from board member - ROI

Ault & Company advances

March 31, 2025

December 31, 2024

Notes from officers – TurnOnGreen, in default

Other related party advances

2 unchanged sentences

Schedule of interest expense, related party

For the Three Months Ended

For the Nine Months Ended

September 30,

For the Three Months Ended March 31,

Interest expense, related party

CONVERTIBLE NOTES

Convertible notes payable at September 30, 2024

and December 31, 2023, were comprised of the following:

Convertible notes payable at March 31, 2025 and

December 31, 2024, were comprised of the following:

Schedule of convertible notes payable

1 unchanged sentence

Interest rate

September 30, 2024

March 31, 2025

December 31, 2024

SJC convertible promissory note

75% of 5-day VWAP

December 31, 2025

ROI senior secured convertible note, in default

$ 0.11 (ROI stock)

Orchid convertible promissory note

75% of 5-day VWAP

June 30, 2025

10% original issue discount (“OID”) convertible promissory note

Forbearance convertible promissory note, in default

Convertible promissory note – OID only, in default

1 unchanged sentence

September 28, 2024

10% OID convertible promissory note – in default as of October 20, 2024

October 19, 2024

Avalanche International Corp.

AVLP convertible promissory notes, principal

1 unchanged sentence

August 22, 2025

ROI senior secured convertible note - in default (1)

$ 0.11 (ROI stock)

April 27, 2024

Fair value of embedded conversion options

1 unchanged sentence

unamortized debt discounts

( 2,179,000 )

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

3 unchanged sentences

Convertible notes payable, net of financing cost – long-term portion

(1) See Arena litigation discussed in Note 22 below.

OID Convertible Promissory Note

July 18, 2024, the Company entered into a note purchase agreement (the “Purchase Agreement”) with an institutional investor

(the “Investor”) pursuant to which the Investor purchased from the Company, on July 19, 2024, in a registered direct offering,

a $ 5.4 million 10% OID Convertible Promissory Note (the “Note”).

The Note was sold to the Investor for a purchase

price of $ 4.9 million, which included an OID of $0.5 million.

The Note accrues interest at the rate of 15 % .

The Note matured

on October 19, 2024 and is in default as of October 20, 2024.

The Note is convertible into shares of Class A common stock at a conversion

price of $ 0.17 per share.

During the three and nine

months ended September 30, 2024, the Investor converted $ 0.7 million of the Note into 3.0 million shares of Class A common stock that

had a fair value of $ 0.9 million at the time of conversion and the Company recognized a $ 0.2 million loss on extinguishment of debt.

forbearance and extension fees and OID costs that are amortized to interest expense over the life of the notes.

Convertible Promissory Notes

March 11, 2024, the Company entered into a note purchase agreement with two institutional investors pursuant to which the investors agreed

to acquire, and the Company agreed to issue and sell in a registered direct offering to the investors an aggregate of $ 2.0 million

convertible promissory notes, bearing interest of 6 % .

The convertible promissory notes were converted into shares of Class A common

stock in May 2024 at a conversion price of $ 0.35 per share and the Company recognized a $ 0.7 million loss on extinguishment

ROI Gain on Extinguishment of Senior Secured

Convertible Notes

During the nine months ended

September 30, 2024, ROI converted $ 2.3 million of ROI senior secured convertible notes that had a fair value of $ 0.9 million at the time

of conversion and recognized a $ 1.4 million gain on extinguishment of debt.

The contractual 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 September 30, 2024 were:

Schedule of contractual maturities

inputs associated with the embedded conversion options include:

Schedule of weighted average assumptions

September 30, 2024

December 31, 2023

Contractual term in years

Dividend yield

February 5, 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 $ 1.9 million (the “February 2025 Convertible Note”),

in exchange for the cancellation of an outstanding term note the Company issued to the investor in April 2024.

That note had an outstanding

principal amount and accrued but unpaid interest of $ 1.9 million.

The February 2025 Convertible Note accrued interest at the rate of 15 %

The February 2025 Convertible Note was to mature on May 5, 2025 .

The February 2025 Convertible Note was convertible into shares

of Class A common stock at a fixed conversion price of $4.00 per share.

March 14, 2025, the Company entered into an exchange agreement with an institutional investor pursuant to which we issued to the investor

a convertible promissory note in the principal face amount of $ 4.2 million in exchange for the cancellation of (i) a term note issued

by the Company on May 16, 2024, with outstanding principal and accrued but unpaid interest of $ 0.7 million, (ii) a term note issued by

the Company on May 20, 2024, with outstanding principal and accrued but unpaid interest of $1.5 million, and (iii) the February 2025 Convertible

Note issued by the Company on February 5, 2025, with outstanding principal and accrued but unpaid interest of $2.0 million.

The note accrues

interest at the rate of 15% per annum, unless an event of default (as defined in the note) occurs, at which time the note would accrue

interest at 18 % per annum.

The note will mature on June 30, 2025 .

The note is convertible into shares of Class A common stock at a conversion

price equal to the greater of (i) $0.40 per share (the “Floor Price”) and (ii) the lesser of 75% of the VWAP (as defined in

the note) of the Class A common stock during the five trading days immediately prior to (A) the date of issuance of the note or (B) the

date of conversion into shares of Class A common stock.

Convertible Promissory Note

February 2025, the Company and an institutional investor (the “Investor”) entered into an amended and restated forbearance

agreement pursuant to which the Investor agreed to forebear through the close of business on May 15, 2025 , from exercising the rights

and remedies it is entitled in consideration for the Company’s agreement to issue to the Investor an amended and restated convertible

promissory note in the amount of $ 3.5 million (the “A&R Forbearance Note”), consisting of (i) the amount then due under

the original forbearance agreement of $0.9 million, (ii) a forbearance extension fee of $0.3 million and (iii) a true-up amount of $2.3

Subject to the approval by the NYSE and the Company’s stockholders, the A&R Forbearance Note is convertible into shares

of Class A common stock at a conversion price equal to $ 2.00 , subject to adjustment.

The A&R Forbearance Note accrues interest at

the rate of 18 % per annum and matures on May 15, 2025.

Convertible Promissory Note

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 will mature on December 31,

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.

Company identified embedded derivative features within certain convertible promissory notes issued during the quarter ended March 31,

2025, that required bifurcation and separate accounting as derivative liabilities under ASC 815.

Specifically, the embedded conversion

options associated with the Orchid convertible promissory notes and the SJC convertible promissory note were determined to meet the criteria

for derivative classification.

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.

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

Schedule of valuation of the embedded derivatives

Orchid Note (March 14, 2025)

SJC Note (March 21, 2025)

Valuation technique

Monte Carlo Simulation

Risk-free interest rate

Activity related to the embedded

conversion option derivative liabilities for the nine months ended September 30, 2024 was as follows:

Schedule of derivative liabilities

Balance as of January 1, 2024

Change in fair value

Ending balance as of September 30, 2024

Expected volatility

Credit-risk adjusted rate

Time to maturity (years)

Stock price at valuation date

Dividend yield

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.

fair value of the embedded derivative liabilities at inception and as of March 31, 2025 was as follows:

· Orchid Note:

$1.0 million;

$1.3 million.

Loss on Extinguishment of Convertible Notes

During the three months ended March 31, 2025, the Company recognized

a total net loss on extinguishment of convertible notes of $4.6 million.

This amount includes:

· A gain of $0.3 million resulting from the conversion of $0.7

million of convertible notes into 0.2 million shares of Class A common stock , which had

a fair value of $0.4 million at the time of conversion ;

loss of $2.6 million related to the issuance of the A&R Forbearance

The A&R Forbearance Note, with a principal amount of $3.5 million, was determined to be substantially different from the original

note due to significant changes in terms, including the addition of a conversion feature and increased principal amount.

As such, extinguishment

accounting was applied, and a loss was recognized based on the difference between the value of the A&R Forbearance Note and the net

carrying amount of the original note;

· A loss of $1.0 million related to the Orchid convertible promissory note issued on March 14, 2025.

principal amount of the new note equaled the aggregate principal and accrued interest of the notes exchanged, the fair value of the new

note, including the embedded derivative liability, exceeded the carrying amount of the original notes.

As a result, a loss on extinguishment

of $1.0 million was recognized;

· A loss of $1.3 million related to the SJC convertible promissory note issued on March 21, 2025.

principal of the new note matched the principal and accrued interest of the exchanged notes, the combined fair value of the new note and

its embedded derivative exceeded the carrying amount of the original instruments.

Accordingly, a $1.3 million loss on extinguishment

was recognized.

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 March 31, 2025 were:

Schedule of contractual maturities

COMMITMENTS AND CONTINGENCIES

16 unchanged sentences

Significant judgment is required to determine both likelihood of there

being and the estimated amount of a loss related to such matters.

being a loss and the estimated amount of a loss related to such matters.

Arena Litigation

1 unchanged sentence

On May 30, 2024, Arena Investors,

LP (“Arena”), in its capacity as collateral agent for five noteholders, filed a filed a Complaint (the “ROI Complaint”)

LP (“Arena”), in its capacity as collateral agent for five noteholders, filed a Complaint (the “ROI Complaint”)

in the Supreme Court of the State of New York, County of New York against the Company and ROI, in action captioned Arena Investors,

1 unchanged sentence

and RiskOn International, Inc.

This litigation relates to

the $ 4.2 million ROI senior secured convertible note disclosed in Note 26.

The ROI Complaint asserts

8 unchanged sentences

On July 31, 2024, the Company

and ROI filed a motion to dismiss seeking to partially dismiss the ROI Complaint, as against the Company, and to dismiss the Compliant,

and ROI filed a motion to dismiss seeking to partially dismiss the ROI Complaint, as against the Company, and to dismiss the ROI Compliant,

in its entirety, as against ROI.

The Motion has been fully

briefed and is currently pending before the Court.

Based on the Company’s

assessment of the facts underlying the claims, the uncertainty of litigation, and the preliminary stage of the case, the Company cannot

reasonably estimate the potential loss or range of loss that may result from this action.

Notwithstanding, the Company has recorded the

unpaid portion of the notes.

An unfavorable outcome may have a material adverse effect on the Company’s business, financial condition

and results of operations.

Arena Investors, LP (Gresham Litigation)

On June 6, 2024, Arena, in

its capacity as collateral agent for Arena and Walleye Opportunities Master Fund Ltd.

(“Walleye”), filed a Complaint (the

“Complaint”) in the Supreme Court of the State of New York, County of New York against the Company and GIGA, in action captioned

Arena Investors, LP v.

Gresham Worldwide, Inc.

f/k/a Giga-Tronics Incorporated and Ault Alliance, Inc.

On July 8, 2024, Arena filed

an Amended Complaint (the “Amended Complaint”) in the above-referenced action.

The Amended Complaint asserts a cause

of action against the Company for declaratory and injunctive relief seeking an injunction enjoining the Company, and its agent, affiliates,

servants, and employees from taking actions in breach of that certain Subordination Agreement, dated January 9, 2023, and entered into

among Walleye, Arena, and the Company.

The Amended Complaint also

asserts causes of action for breach of contract against GIGA based on two discrete convertible promissory notes (the “Notes”)

that GIGA entered into with each of Arena and Walleye, as well as a claim for breach duty of good faith and fair dealing, against GIGA,

and seeks, among other things, monetary damages in excess of $ 4.2 million, with interest thereon, attorneys’ fees, costs, and disbursements.

The Amended Complaint further asserts another cause of action against GIGA for breach of contract seeking declaratory and injunctive relief

based on alleged inspection rights contained in a Security Agreement, dated January 9, 2023 (the “Security Agreement”), and

entered into between the Walleye, Arena, and GIGA, which seeks the issuance of an injunction related to such alleged inspection rights,

plus the costs and out-of-pocket expenses associated with the enforcement of same.

On July 12, 2024, the Court

granted injunctive relief to Arena and ordered GIGA to comply with the inspection rights provision of the Security Agreement by July 17,

On July 19, 2024, Arena voluntarily

discontinued its cause of action for breach duty of good faith and fair dealing claim against GIGA.

On July 29, 2024, the Company

and GIGA filed a motion to dismiss, strike, and for sanctions (the “Motion”), in response to the Amended Complaint, on the

grounds that, amongst other things, the underlying Notes are criminally usurious under New York.

On August 14, 2024, GIGA filed a petition

for reorganization under Chapter 11 of the bankruptcy laws.

On November 12, 2024, GIGA removed the state

court action to the United States District Court for the Southern District of New York.

On or about January 21, 2025,

the Court entered an order denying the part of the motion which sought partial dismissal of the ROI Complaint, as against Company, and

granting the part of the motion which sought dismissal of the ROI Complaint, in its entirety, as against ROI.

On February 18, 2025, the

Company filed an Answer to the ROI Complaint and asserted numerous affirmative defenses.

Based on the Company’s

13 unchanged sentences

The Company had accrued loss

contingencies related to litigation matters of $ 2.4 million and $ 2.3 million as of September 30, 2024 and December 31, 2023, respectively.

contingencies related to litigation matters of $ 2.1 million and $ 2.3 million as of March 31, 2025 and December 31, 2024, respectively.

STOCKHOLDERS’ EQUITY

Reverse Stock Split

On January 12, 2024, pursuant

to the authorization provided by the Company’s stockholders at the annual meeting of stockholders, the Company’s board of

directors approved an amendment to the Certificate of Incorporation to effectuate a reverse stock split of the Company’s issued

and outstanding common stock by a ratio of one-for-twenty-five (the “1-for-25 Reverse Split”).

The 1-for-25 Reverse Split

did not affect the number of authorized shares of common stock, preferred stock or their respective par value per share.

As a result of

the 1-for-25 Reverse Split, each twenty-five shares of common stock issued and outstanding prior to the 1-for-25 Reverse Split were converted

into one share of common stock.

The 1-for-25 Reverse Split became effective in the State of Delaware on January 16, 2024.

2023 Issuances

Common ATM Offering

the three and nine months ended September 30, 2024, the Company sold an aggregate of 0 and 25.6 million shares of Class A common stock

pursuant to the At-The-Market issuance sales agreement, as amended, entered into with Ascendiant Capital Markets, LLC in 2023 (the “2023

Common ATM Offering”) for gross proceeds of $ 0 and $ 14.6 million, respectively.

Series C Convertible Preferred Stock Offering,

Related Party

During the three and nine

months ended September 30, 2024, the Company sold to Ault & Company an aggregate of 300 and 2,800 shares of Series C Preferred Stock

and Warrants to purchase 0.1 million and 0.8 million shares of Class A common stock, for a total purchase price of $ 0.3 million and $ 2.8

million, respectively.

Amendment to Loan and Guarantee Agreement

September 17, 2024, the loan and guarantee agreement, dated as of December 14, 2023, as amended, pursuant to which the Company has guaranteed

financial obligations of Ault & Company borrowings, was amended regarding the Company’s obligations to fund the restricted cash

Segregated Account.

The Company agreed to deposit

in the Segregated Account:

(i) $0.4 million monthly commencing on September 30, 2024 and ending on February 28, 2025;

and (ii) $0.5

million monthly commencing on March 31, 2025 and ending on the earlier of the term loan maturity date, prepayment of the term loan in

full or the date on which the balance of the Segregated Account exceeds 110% of the outstanding balance of the term loan.

As of September

30, 2024, the Company had deposited $ 6.5 million in the Segregated Account.

In October 2024, the Company deposited an additional $ 0.4

million in the Segregated Account.

ELOC Purchase Agreement

On June 20, 2024, the Company

entered into a purchase agreement, as amended on November 1, 2024 (the “ELOC Purchase Agreement”) with Orion Equity Partners,

LLC (“Orion”), which provides that, upon the terms and subject to the conditions and limitations set forth therein, the Company

has the right to direct Orion to purchase up to an aggregate of $ 37.5 million of shares of the Company’s 13.00 % Series D Cumulative

Redeemable Perpetual Preferred Stock, par value $ 0.001 per share (the “Preferred Shares”) over the 36 -month term of the ELOC

Purchase Agreement at a purchase price equal to 91% of the average closing stock price during the seven consecutive trading days immediately

preceding a given purchase date.

Under the ELOC Purchase Agreement, after the satisfaction of certain commencement conditions, including,

without limitation, the effectiveness of a resale registration statement registering the Preferred Shares for sale (the “Registration

The ELOC Purchase Agreement

may be terminated by the Company at any time after commencement, at its discretion, provided that at the time of termination, the Company

does not have any outstanding amounts owed to the Lenders, who are affiliates of Orion, pursuant to the Credit Agreement.

There have been no purchases

under the ELOC Purchase Agreement.

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

The Company’s effective tax rate (“ETR”) from continuing operations was 0.1 % and 2.0 %

for the three months ended September 30, 2024 and 2023, respectively, and ( 0.21 % )

and 0.4 % for the nine

months ended September 30, 2024 and 2023, respectively.

The Company recorded an income tax provision of $ 67,000 and

$ 0.1 million for the three months

ended September 30, 2024 and 2023, respectively, and an income tax provision of $ 47,000 and

an income tax provision of $ 0.5

million for the nine months ended September 30, 2024 and 2023, 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.

federal income tax purposes and changes in

valuation allowance.

NET LOSS PER SHARE

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 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 common stock, consisted of the following at September 30, 2024 and 2023:

Schedule of net loss per share

September 30,

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.

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.

Preferred Stock

Preferred stock as of March

31, 2025 consisted of the following:

Schedule of preferred stock

Shares Issued and

Outstanding at

March 31, 2025

Series A Convertible Preferred Stock

Series B Convertible Preferred Stock

Series C Convertible Preferred Stock

Series D Cumulative Redeemable Perpetual Preferred Stock

Series E Redeemable Perpetual Preferred Stock

Series F Exchangeable Preferred Stock

Series G Convertible Preferred Stock

Preferred stock as of December

31, 2024 consisted of the following:

Shares Issued and

Outstanding at

December 31, 2024

Series A Convertible Preferred Stock

Series C Convertible Preferred Stock

Series D Cumulative Redeemable Perpetual Preferred Stock

Series E Redeemable Perpetual Preferred Stock

Series F Exchangeable Preferred Stock

Series G Convertible Preferred Stock

The Company is authorized

to issue 25.0 million shares of preferred stock, $0.001 par value.

As of March 31, 2024, the rights, preferences, privileges and restrictions

on the remaining authorized 18.3 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.

$50.0 Million Securities Purchase Agreement

for Sale of 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, provided, however,

that the investor has the ability, exercisable in its sole discretion, to purchase any number of shares of Series B Preferred Stock prior

to the dates of the tranche closings provided for in the securities purchase agreement.

The initial tranche closing, which is expected

to close promptly after the investor has converted out of the Exchange Note, will consist of the sale and issuance to the investor of

2,000 shares of Series B Preferred Stock for an aggregate of $2.0 million.

Pursuant to the securities purchase agreement, provided certain

closing conditions have been met, the investor shall purchase up to 4,800 shares of Series B Preferred Stock on a monthly basis, with

the investor being required to purchase 1,000 shares per month.

Each share of Series B Preferred

Stock has a stated value of $1,000 and is convertible into shares of Class A common stock at a conversion price equal the lesser of a

25% discount to the Company’s volume weighted average price during the five trading days immediately prior to (A) the date of execution

of the securities purchase agreement or (B) the date of conversion into shares of Class A common stock, but not greater than $10 per share.

Notwithstanding the foregoing, in no event shall the Series B Preferred Stock be convertible at less than the Floor Price.

of Series B Preferred Stock are entitled to cumulative cash dividends at an annual rate of 15%, or $150 per share, based on the stated

value per share.

Dividends shall accrue for as long as any shares of Series B Preferred Stock remain issued and outstanding and are payable

monthly in arrears.

For the first two years, the Company may elect to pay the dividend amount in additional shares of Series B Preferred

Stock rather than cash.

The holders of the Series B Preferred Stock are entitled to vote with the Class A common stock as a single class

on an as-converted basis.

Subsequent Event – Series B Convertible

Preferred Stock Amendment

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.

The amendment, which was approved by the Board of Directors on April 22, 2025, became effective upon filing with the

Secretary of State of the State of Delaware.

The amendment revised the definition of “Conversion Price” to the greater of

(i) the Floor Price and (ii) 75% of the Company’s lowest VWAP during the five trading days immediately preceding conversion, subject

to a maximum price of $10.00 per share, as adjusted for certain corporate actions.

The Company calculates its

interim income tax provision in accordance with ASC Topic 270, Interim Reporting, and Accounting Standards Codification (“ASC”)

Topic 740, Income Taxes.

The effective tax rate (“ETR”) from continuing operations was 1.3 % for the three months ended March

31, 2025, and 0.0 % for the same period in 2024.

The Company recorded an income tax provision of $ 0.1 million for the three months ended

March 31, 2025, and recognized an income tax benefit of $ 1,000 for the three months ended March 31, 2024.

The difference between the ETR

and the federal statutory rate of 21 % is primarily due to items recognized for financial reporting purposes that are permanently disallowed

federal income tax purposes, as well as changes in the valuation allowance.

NET INCOME (LOSS) PER SHARE

The following table presents

the calculation of basic and diluted net income per share for the three months ended March 31, 2024:

Schedule of basic and diluted net income per share

For the Three

March 31, 2024

Net income from continuing operations

net income attributable to non-controlling interest, continuing operations

( 7,135,000 )

Preferred stock dividends

( 1,260,000 )

Numerator for basic earnings per share (“EPS”) - Net income (loss) from continuing operations attributable to Hyperscale Data, Inc.

Numerator for basic EPS - Net loss from discontinued operations attributable to Hyperscale Data, Inc.

( 3,336,000 )

Effect of dilutive securities:

Interest expense associated with convertible notes, continuing operations

Series C convertible preferred stock dividend

Numerator for diluted EPS - Net income from continuing operations attributable to Hyperscale Data, Inc., after the effect of dilutive securities

Numerator for diluted EPS - Net loss from discontinued operations attributable to Hyperscale Data, Inc.

$ ( 3,336,000 )

Denominator for basic EPS - Weighted average shares of common stock outstanding

Effect of dilutive securities:

Convertible notes

Series C convertible preferred stock

Denominator for diluted EPS - Weighted average shares of common stock outstanding after the effect of dilutive securities

Basic net income (loss) per share from:

Continuing operations

Discontinued operations

Basic net income per share

Diluted net income (loss) per share from:

Continuing operations

Discontinued operations

Diluted net income per share

For the three ended March

31, 2025, net loss per share is computed by dividing the net loss to common stockholders by the weighted average number of common shares

The calculation of the basic and diluted earnings per share is the same for the three months ended March 31, 2025, 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, 2025:

Schedule of anti-dilutive

Convertible preferred stock

Convertible notes

Stock options

Class B common stock

SEGMENT AND CUSTOMERS INFORMATION

The Company had the following

reportable segments as of September 30, 2024 and 2023;

The Company had the following reportable

segments as of March 31, 2025 and 2024;

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 and its operating segments for the three and nine months ended September

The following data presents the revenues,

expenditures and other operating data of the Company and its operating segments for the three months ended March 31, 2025:

Schedule of operating segments

Nine Months Ended

September 30, 2024

Revenue, crane operations

Revenue, crypto assets mining

Revenue, hotel and real estate operations

Revenue, crane operations

Revenue, lending and trading activities

Total revenues

Depreciation and amortization expense

Impairment of property and equipment

(Loss) income from operations

$ ( 2,781,000 )

$ ( 11,066,000 )

Revenue, other

Total revenue

Cost of revenue

Gross profit (loss)

( 1,317,000 )

Operating expenses

Research and development

Selling and marketing

General and administrative

Total operating expenses

(Loss) income from operations

$ ( 778,000 )

1 unchanged sentence

$ ( 1,266,000 )

Interest expense

$ ( 1,058,000 )

2 unchanged sentences

( 6,384,000 )

Other income (expense):

Interest and other income

Interest expense

( 3,839,000 )

Loss on extinguishment of debt

( 4,569,000 )

Capital expenditures for the nine months ended September 30, 2024

Segment identifiable assets as of September 30, 2024

Gain on deconsolidation of subsidiary

Loss on the sale of fixed assets

Total other expense, net

Loss before income taxes

$ ( 4,664,000 )

Three Months Ended September 30, 2024

Revenue, crypto assets mining

Revenue, hotel and real estate operations

Revenue, crane operations

Revenue, lending and trading activities

Total revenues

Depreciation and amortization expense

Impairment of property and equipment

(Loss) income from operations

$ ( 1,479,000 )

$ ( 13,887,000 )

$ ( 1,268,000 )

$ ( 8,877,000 )

Interest expense

$ ( 1,839,000 )

$ ( 903,000 )

Interest expense

$ ( 225,000 )

1 unchanged sentence

$ ( 3,839,000 )

Capital expenditures for the year ended March 31, 2025

Segment identifiable assets as of March 31, 2025

$ 218,254,000

Capital expenditures for the three months ended September 30, 2024

The following data presents

the revenues, expenditures and other operating data of the Company and its operating segments for the three and nine months ended September

Nine Months Ended

September 30, 2023

Revenue, product

The following data presents the revenues,

expenditures and other operating data of the Company and its operating segments for the three months ended March 31, 2024:

Revenue, crane operations

Revenue, crypto assets mining

1 unchanged sentence

Revenue, lending and trading activities

Revenue, crane operations

Total revenues

$ 104,238,000

Depreciation and amortization expense

Revenue, other

Total revenue

Cost of revenue

Operating expenses

Research and development

Selling and marketing

General and administrative

Total operating expenses

(Loss) income from operations

3 unchanged sentences

$ ( 5,535,000 )

$ ( 4,598,000 )

$ ( 30,216,000 )

$ ( 33,590,000 )

$ ( 20,011,000 )

$ ( 97,155,000 )

Capital expenditures for the nine months ended September 30, 2023

Segment identifiable assets as of December 31, 2023

Other income (expense):

Interest and other income

Interest expense

( 5,631,000 )

Three Months Ended September 30, 2023

Revenue, product

Revenue, crypto assets mining

Revenue, commercial real estate leases

Revenue, lending and trading activities

Revenue, crane operations

Total revenues

Gain on conversion of investment in equity securities to marketable equity securities

Gain on extinguishment of debt

Loss from investment in unconsolidated entity

Provision for loan losses, related party

( 3,068,000 )

Gain on the sale of fixed assets

Total other expense, net

Income before income taxes

Depreciation and amortization expense

(Loss) income from operations

Interest expense

$ ( 118,000 )

4 unchanged sentences

$ ( 5,631,000 )

Capital expenditures for the three months ended March 31, 2024

Segment identifiable assets as of December 31, 2024

$ 220,471,000

Capital expenditures for the three months ended September 30, 2023

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:

Schedule of gross accounts receivable

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:

Schedule of concentrations of credit and revenue risk

Accounts Receivable

September 30,

For the Three Months Ended September 30,

For the Nine Months Ended September 30,

For the Three Months Ended March 31,

less than 10%

SUBSEQUENT EVENTS

Additional Closings of Series

C Preferred Stock, Related Party

In October and November 2024, the Company sold to Ault & Company

an aggregate of 2,230 shares of Series C Preferred Stock and Warrants to purchase 0.7 million shares of Class A common stock, for a total

purchase price of $2.2 million.

Agreement to Sell

Petersburg Property

October 2, 2024, Third Avenue Apartments LLC, a wholly owned indirect subsidiary of the Company, entered into a contract of sale with

a third-party purchaser and agreed to sell its real estate property in St.

Petersburg, Florida for $ 13.2 million.

The closing of the sale

of the property is expected to occur on or before December 31, 2024.

The Company is obligated to pay $ 11 million of the purchase price

into the segregated account for the benefit of its senior secured lenders.

Based on the expected sale price of the St.

Petersburg property,

the Company recorded an impairment charge of $ 1.3 million during the three and nine months ended September 30, 2024 in the condensed

consolidated statement of operations and comprehensive loss.

10.00% Series E Cumulative Redeemable

Perpetual Preferred Stock (the “Series E Preferred Stock”)

On November 11, 2024 the

Company filed a Certificate of Designation, Rights and Preferences (the “Certificate of Designation”) with the Secretary

of State of the State of Delaware to establish the preferences, voting powers, limitations as to dividends or other distributions, qualifications,

terms and conditions of redemption and other terms and conditions of the Company’s Series E Preferred Stock.

The following is a

summary description of those terms and the general effect of the issuance of the shares of Series E Preferred Stock on the Company’s

other classes of registered securities.

The Series E Preferred Stock

will, as to dividend rights and rights as to the distribution of assets upon the Company’s liquidation, dissolution or winding-up,

(1) senior to all classes or series of Common Stock and to all other equity securities issued by the Company other than equity securities

referred to in clauses (2) and (3);

(2) on parity with any future class or series of the Company’s equity securities expressly designated

as ranking on parity with the Series E Preferred Stock, (3) junior to the Company’s Series A Cumulative Redeemable Perpetual Preferred

Stock and its Series C Convertible Preferred Stock;

and all equity securities issued by the Company expressly designated as ranking senior

to the Series E Preferred Stock;

and (4) junior to all the Company’s existing and future indebtedness.

To the extent the shares

of Series E Preferred Stock are issued, the Company will pay cumulative cash dividends on the Series E Preferred Stock when, as and if

declared by its board of directors (or a duly authorized committee of its board of directors), only out of funds legally available for

payment of dividends.

Dividends on the Series E Preferred Stock will accrue on the stated amount of $25.00 per share of the Series E Preferred

Stock at a rate per annum equal to 10.00% (equivalent to $3.00 per year), payable monthly in arrears.

The Series E Preferred Stock

is redeemable by the Company.

Holders of shares of the Series E Preferred Stock generally will have no voting rights, except as required

by law and as provided in the Certificate of Designation.

Voting rights for holders of the Series E Preferred Stock exist primarily with

respect to material and adverse changes in the terms of the Series E Preferred Stock and the creation of additional classes or series

of preferred stock that rank senior to the Series E Preferred Stock.

Further, unless the Company

has received the approval of two-thirds of the votes entitled to be cast by the holders of Series E Preferred Stock, the Company will

not effect any consummation of a binding share exchange or reclassification of the Series E Preferred Stock or a merger or consolidation

of the Company with another entity, unless (a) the shares of Series E Preferred Stock remain outstanding or, in the case of a merger or

consolidation with respect to which the Company is not the surviving entity, the shares of Series E Preferred Stock are converted into

or exchanged for preference securities, or (b) such shares remain outstanding or such preference securities are not materially less favorable

than the Series E Preferred Stock immediately prior to such consummation.

Reverse Stock Split

At the June 28, 2024 annual

meeting of stockholders, voted upon and approved Proposal 5, an amendment to the Company’s Certificate of Incorporation to effect

a Reverse Split with a ratio of not less than one-for-two and not more than one-for-thirty-five at any time prior to June 27, 2025, with

the exact ratio to be set at a whole number within this range as determined by the Company’s board of directors in its sole discretion.

On October 24, 2024, the

board of directors authorized a special committee of the board to determine the ratio of the reverse split.

On November 8, 2024, the special

committee approved a one-for-thirty-five reverse split of the Class A common stock that will be effective in the State of Delaware on

Friday, November 22, 2024.

The Company anticipates that beginning with the opening of trading on Monday, November 25, 2024, the Company’s

Class A common stock will trade on the NYSE American on a split-adjusted basis.

Special Dividend of Class B Common Stock

On November 15, 2024, the Company announced

that it plans to issue a special one-time dividend (the “Distribution”) of 5.0 million shares

of its Class B Common Stock (the “Class B Common Stock”) to all holders of its Class A Common Stock (the “Class A Common

Stock”) and the Series C Convertible Preferred Stock on an as-converted basis.

The record date for the

Distribution is November 29, 2024.

Stockholders who own the Company’s Class A Common Stock at the close of trading on that date

will be eligible to receive the shares of Class B Common Stock.

Further, the Company has set a payment date of December 16, 2024, subject

to adjustment.

On the record date, the Company anticipates there will be approximately 1.1 million shares of Class A Common Stock and

approximately 5.9 million Class A Common Stock equivalents, based on the current conversion price of the Company’s Series C Convertible

Preferred Stock, issued and outstanding (collectively, the “Eligible Capital Stock”), for an aggregate of approximately 7.0

million shares of Eligible Capital Stock.

Consequently, the number of shares of Class B Common Stock issuable is approximately 0.71 for

each share of Eligible Capital Stock.

The foregoing figures reflect the implementation of the one-for-thirty-five reserve stock split

that will be effectuated on November 25, 2024.

The Class B Common Stock

is identical to the currently outstanding Class A Common Stock, with the exception that each share thereof carries ten times the voting

power of a share of Class A Common Stock.

The Class B Common Stock is convertible at any time after the payment date into Class A Common

Stock on a one-for-one basis.

Issuances of Series D Preferred Stock

From April 1, 2025 through

May 12, 2025, the Company issued a total of 52,700 shares of its Series D preferred stock for the settlement of ELOC advances

totaling $ 0.6 million.

Sale of Series G Preferred Stock

On April 10, 2025, the Company

sold to Ault & Company 100 shares of Series G Preferred Stock and Series G Warrants to purchase 16,898 shares of Class A common stock,

for a purchase price of $ 0.1 million.

10% OID Convertible Promissory Note

Between April 9, 2025 and May 5, 2025,

the Company issued 611,812 shares of Class A common stock upon the conversion of $ 3.6 million of principal and interest on the 10% OID

convertible promissory note.

The Class A Common Stock was issued at a price of $ 5.87 per share.

Orchid Convertible Promissory Note

Between April 24, 2025 and May 5, 2025,

the Company issued 184,623 shares of Class A common stock upon the conversion of $ 0.2 million of principal and interest on the Orchid

convertible promissory note.

The Class A Common Stock was issued at a price of $ 1.28 per share.

April 1, 2025 Convertible Promissory Note

On April 1, 2025, the Company

issued to an institutional investor a convertible promissory note in the principal face amount of $ 1.7 million in consideration for an

advance we received of $ 1.5 million.

The note accrues interest at the rate of 15 % per annum.

The note will mature on September 30, 2025 .

The 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 note) of the Class A common stock during the five trading days immediately prior to (A)

the date of issuance of the note or (B) the date of conversion into shares of Class A common stock.

April 15, 2025 Convertible Promissory

On April 15, 2025, the Company

entered into securities purchase agreements (the “Agreements”) with institutional investors (the “Investors”),

pursuant to which the Company issued to the Investors convertible promissory notes in the aggregate principal face amount of $5.0 million

(the “Notes”) in aggregate gross consideration of $ 4.0 million in cash paid by the Investors to the Company, prior to placement

agent fees and expenses of approximately $ 0.5 million (the “Transaction”).

The Notes have an aggregate

principal face amount of $ 5.0 million and were issued with an original issue discount of 20 % , or $ 1.0 million.

The Notes do not accrue

interest unless an event of default at which time the Notes would accrue interest at 20% per annum.

The Notes will mature on September

The Notes are convertible into shares (the “Conversion Shares”) of the Company’s class A common stock at any

time after NYSE American approval of the supplemental listing application at a conversion price equal to the greater of (i) $0.40 per

share (the “Floor Price”), which Floor Price shall not be adjusted for stock dividends, stock splits, stock combinations and

other similar transactions and (ii) 80% of the lowest closing price of the Class A common stock during the five trading days immediately

prior to the date of conversion into shares of Class A common stock.

May 13, 2025 OID Only Term

2025, the Company entered into an OID only term note agreement with an institutional investor with a principal amount of $ 1.4 million

and an OID of $ 0.1 million.

The maturity date of the promissory note is May 27, 2025.

Ault entered into a personal guaranty agreement

for the benefit of the investor.

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

Item 1. Financial Statements