What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2025-11-17 compared with 2025-08-15 · 335 added, 268 removed, 405 unchanged (60% of the section changed)

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and “our” refer to Hyperscale Data, Inc., a Delaware corporation.

Through its wholly owned subsidiary Sentinum, Inc., Hyperscale

Data owns and operates a data center at which it mines digital assets and offers colocation and hosting services for the emerging artificial

intelligence (“AI”) ecosystems and other industries.

Hyperscale Data’s other wholly owned subsidiary, Ault Capital Group,

(“ACG”), is a diversified holding company pursuing growth by acquiring undervalued businesses and disruptive technologies.

Hyperscale Data currently expects the divestiture

of ACG (the “Divestiture”) to occur in the first quarter of 2026, though there can be no assurance that the Divestiture will

be completed during such quarter.

Upon the occurrence of the Divestiture, the Company would be an owner and operator of data centers to

support high-performance computing services, as well as a holder of digital assets.

Until the Divestiture occurs, the Company will continue

to provide, through ACG and its wholly and majority-owned subsidiaries and strategic investments, mission-critical products that support

a diverse range of industries, including an AI software platform, social gaming platform, equipment rental services, defense/aerospace,

industrial, automotive and hotel operations.

In addition, ACG is actively engaged in extending private credit and structured finance through

a licensed lending subsidiary.

Hyperscale Data operates as an artificial intelligence (“AI”)

data center company anchored by Bitcoin.

Through its wholly owned subsidiary, Sentinum, Inc., the Company owns and operates a large-scale

data center platform that integrates AI compute infrastructure with Bitcoin mining operations under a unified, parallel compute model.

This hybrid architecture enables Hyperscale Data to generate compute power for enterprise AI workloads through NVIDIA graphic processing

unit clusters, while also operating high-efficiency Bitcoin mining systems that contribute to the Bitcoin network and the Company’s

growing digital asset treasury.

Through its other wholly owned

subsidiary, Ault Capital Group, Inc.

(“ACG”), the Company currently holds a portfolio of diversified businesses and strategic

investments spanning commercial lending and trading, hotel operations, crane rental, AI-driven software and gaming platforms, and commercial

In addition, ACG is actively engaged in extending private credit and structured finance through a licensed lending subsidiary.

Hyperscale Data currently expects the divestiture of ACG (the “Divestiture”) to occur in the second quarter of 2026, though

there can be no assurance that the Divestiture will be completed during such quarter.

Upon the occurrence of the Divestiture, the Company

would operate as a focused AI data center and Bitcoin infrastructure company.

Recent Events and Developments

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Ault entered into a personal guaranty agreement for the benefit of the investor.

On June 6, 2025, we entered

into a settlement agreement (the “Agreement”) with our defense affiliate Gresham Worldwide, Inc.

GIGA’s senior secured lenders pursuant in its Chapter 11 bankruptcy proceedings.

While the Agreement is subject to court approval,

GIGA is expected to emerge from bankruptcy as a subsidiary of the Company on or before October 1, 2025.

On June 6, 2025, we entered into a settlement agreement (the “Agreement”)

with our defense affiliate Gresham Worldwide, Inc.

(“GIGA”) and GIGA’s senior secured lenders pursuant in its Chapter

11 bankruptcy proceedings.

On August 29, 2025, the United States Bankruptcy Court for the District of Arizona confirmed GIGA’s bankruptcy

Under that plan, GIGA’s senior lenders released GIGA and us in exchange for a settlement payment.

was made on September 30, 2025, and it is anticipated that the plan will be effective, and GIGA will emerge from bankruptcy, on November

On June 9, 2025, Sentinum

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Upon any curtailment, the net profits from such energy sales shall be equally split between Sentinum and the Service Provider.

On July 31, 2025, we entered into a securities purchase agreement (the

“July 2025 SPA”) with Ault & Company, Inc.

(“Ault & Company”), pursuant to which we agreed to sell, in

one or more closings, to Ault & Company up to 100,000 shares of Series H convertible preferred stock (“Series H Preferred Stock”)

for a total purchase price of up to $100.0 million.

The July 2025 SPA provides that the financing may be conducted through one or more

As of the date of this filing, no shares of Series H Preferred Stock have been sold, nor has the Certificate of Designations

been filed with the State of Delaware, the jurisdiction where we are incorporated.

On July 31, 2025, we entered

into a securities purchase agreement (the “July 2025 SPA”) with Ault & Company, Inc.

(“Ault & Company”),

pursuant to which we agreed to sell, in one or more closings, to Ault & Company up to 100,000 shares of Series H convertible preferred

stock (“Series H Preferred Stock”) for a total purchase price of up to $100.0 million.

The July 2025 SPA provides that the

financing may be conducted through one or more closings.

As of the date of this filing, we have sold 4,000 shares of Series H Preferred

Stock to Ault & Company.

Each share of Series H Preferred

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with the Class A common stock as a single class on an as-converted basis.

On August 29, 2025, we entered

into a sales agreement with Wilson-Davis & Co., Inc.

to sell shares of our Class A common stock, having an aggregate offering price

of up to $125 million from time to time, through an “at-the-market” (“ATM”) offering program.

Between August 29,

2025 and November 4, 2025, we received gross proceeds of $125 million through the sale of 255.4 million shares of our Class A common stock

through the ATM offering.

On September 26, 2025, Ault Lending entered into a

loan and security agreement (the “Loan Agreement”) with GIGA, pursuant to which Ault Lending agreed to loan GIGA up to $10.0

million (the “Loan”), subject to the terms and conditions of the Loan Agreement.

The Loan, which is evidenced by the issuance

by GIGA of a15% Senior Secured Original Issue Discount Convertible Promissory Note (the “GIGA Note”) in the original principal

amount of $11.0 million, was to be funded in three tranches.

The first tranche, in an amount of $6.5 million, was funded on September

30, 2025, and the remaining tranches, totaling $3.5 million, are expected to be funded pursuant to the terms of the Loan Agreement.

GIGA Note, which matures on November 15, 2028, was issued as part of GIGA’s confirmed Chapter 11 plan of reorganization and is secured

by substantially all of GIGA’s assets.

The GIGA Note is convertible into shares of GIGA common stock at a conversion price equal

to the greater of (i) $0.10 per share (the “GIGA Floor Price”), which GIGA Floor Price shall not be adjusted for stock dividends,

stock splits, stock combinations and other similar transactions and (ii) the lesser of a 5% premium to the volume weighted average price

during the five trading days immediately prior to the trading day immediately preceding the date of conversion into shares of common stock

On November 7, 2025, we entered

into an amendment to the July SPA to provide for an extension of the date on which the final closing (the “Termination Date”)

may occur to the later of (i) December 31, 2027, and (ii) the date that shall be one year following the date upon which the Company has

completed taking the requisite action(s) to enable it to issue shares of Class A common stock to each person holding instruments entitling

such person to convert all of such convertible instrument, including but not limited to the Series H Preferred Stock, into shares of Class

A common stock provided, however, that Ault & Company may extend the Termination Date for an additional ninety (90) days, by notice

to the Company.

Presentation of GIGA as Discontinued Operations

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The filing placed GIGA under the control of the bankruptcy court, which oversees its reorganization and restructuring process.

assessed the inherent uncertainties associated with the outcome of the Chapter 11 reorganization process and the anticipated duration

We assessed the inherent uncertainties associated with the outcome of the Chapter 11 reorganization process and the anticipated duration

thereof, and concluded that it was appropriate to deconsolidate GIGA and its subsidiaries effective on the petition date.

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all periods presented.

On June 6, 2025, we entered into a settlement agreement with GIGA and

GIGA’s senior secured lenders pursuant.

On August 29, 2025, the United States Bankruptcy Court for the District of Arizona

confirmed GIGA’s bankruptcy plan.

Under that plan, GIGA’s senior lenders released GIGA and us in exchange for a settlement

That payment was made on September 30, 2025, and it is anticipated that the plan will be effective, and GIGA will emerge from

bankruptcy, on November 28, 2025.

Change in Plan of Sales of AGREE Hotel Properties

On April 30, 2024, we had a change in plan of sale for our four hotels

owned and operated by Ault Global Real Estate Equities, Inc.

As a result, as of April 30, 2024, the assets no longer

met the held for sale criteria and were required to be reclassified as held and used at the lower of adjusted carrying value or the fair

value at the date of the determination not to sell.

On April 30, 2024, we had

a change in plan of sale for our four hotels owned and operated by Ault Global Real Estate Equities, Inc.

result, as of April 30, 2024, the assets no longer met the held for sale criteria and were required to be reclassified as held and used

at the lower of adjusted carrying value or the fair value at the date of the determination not to sell.

For presentation purposes,

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In connection with the deconsolidation, we

recognized a gain of $10.0 million, which is included in the condensed consolidated statement of operations for the six months ended June

We evaluated the criteria for discontinued operations and determined that the operations of AVLP did not meet the requirements

for such classification.

recognized a gain of $10.0 million, which is included in the condensed consolidated statement of operations for the nine months ended

September 30, 2025.

We evaluated the criteria for discontinued operations and determined that the operations of AVLP did not meet the

requirements for such classification.

Deconsolidation of Eco Pack Technologies Limited

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In connection with the deconsolidation, we recognized a loss of $0.4 million, which is included in the condensed

consolidated statement of operations for the six months ended June 30, 2025.

We evaluated the criteria for discontinued operations and

determined that the operations of Eco Pack did not meet the requirements for such classification.

consolidated statement of operations for the nine months ended September 30, 2025.

We evaluated the criteria for discontinued operations

and determined that the operations of Eco Pack did not meet the requirements for such classification.

Deconsolidation of a Subsidiary of RiskOn International,

the three months ended September 30, 2025, we recognized a gain of $2.7 million in connection with the bankruptcy proceedings for a subsidiary

We deconsolidated the subsidiary as we determined that we no longer maintained a controlling financial interest in the subsidiary.

The gain recognized reflects the derecognition of the subsidiary’s remaining assets, liabilities, and equity balances.

the criteria for discontinued operations and determined that the operations of the subsidiary did not meet the requirements for such classification.

As a holding company, our

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We have, are and will consider initiatives including, among others:

offerings, the sale of individual partner companies, the sale of certain or all partner company interests in secondary market transactions,

or a combination thereof, as well as other opportunities to maximize stockholder value.

We anticipate returning value to stockholders

after satisfying our debt obligations and working capital needs.

public offerings, the sale of individual partner companies, the sale of certain or all partner company interests in secondary market

transactions, or a combination thereof, as well as other opportunities to maximize stockholder value.

We anticipate returning value to

stockholders after satisfying our debt obligations and working capital needs.

From time to time, we engage

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Results of Operations

Results of Operations for the Three Months Ended June 30, 2025 and

Results of Operations for the Three Months Ended September 30, 2025

The following table summarizes

the results of our operations for the three months ended June 30, 2025 and 2024.

For the Three Months Ended June 30,

the results of our operations for the three months ended September 30, 2025 and 2024.

For the Three Months Ended September 30,

Revenue, crane operations

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Total cost of revenue

Gross profit (loss)

Operating expenses

Research and development

Selling and marketing

General and administrative

Selling and marketing

Research and development

Impairment of property and equipment

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Interest expense

Loss on extinguishment of debt

Loss from investment in unconsolidated entity

Impairment of equity securities

Gain (loss) on extinguishment of debt

Gain on deconsolidation of subsidiary

Loss on the sale of fixed assets

Total other expense, net

(12,855,000 )

(Loss) gain on the sale of fixed assets

Total other income (expense), net

Loss before income taxes

1 unchanged sentence

(31,803,000 )

Income tax benefit

Income tax provision

Net loss from continuing operations

4 unchanged sentences

(29,639,000 )

Net (income) loss attributable to non-controlling interest

Net loss attributable to non-controlling interest

Net loss attributable to Hyperscale Data

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Revenues by business category

for the three months ended June 30, 2025 and 2024 were as follows:

For the Three Months Ended June 30,

for the three months ended September 30, 2025 and 2024 were as follows:

For the Three Months Ended September 30,

Revenue, crypto assets mining

$ (3,806,000 )

Revenue, commercial real estate leases

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Total revenue

n/m - not meaningful

$ (6,733,000 )

Revenues from Sentinum’s

crypto assets mining operations decreased $3.8 million to $4.7 million for the three months ended June 30, 2025, compared to $8.5 million

for the three months ended June 30, 2024.

The decrease was due primarily to a $1.7 million decline in revenue from mined crypto assets

at Sentinum owned and operated facilities coupled with a $2.2 million decline in revenue from Sentinum crypto mining equipment hosted

at third-party facilities.

The $1.7 million decrease in revenue from mined crypto assets at Sentinum owned and operated facilities was

due to the April 2024 Bitcoin halving event that occurred on the Bitcoin network and a 45% increase in the average Bitcoin mining difficulty

level, partially offset by a 50% increase in the average Bitcoin price for the three months ended June 30, 2025, compared to the corresponding

period in 2024.

No revenue was generated from third-party hosted mining operations in 2025.

crypto assets mining operations increased by $0.4 million, to $5.7 million for the three months ended September 30, 2025, compared to

$5.3 million for the same period in 2024.

The increase was primarily due to a $1.3 million, or 30%, increase in revenue from self-mined

Bitcoin operations at Sentinum-owned and operated facilities.

This increase was partially offset by the cessation of third-party hosted

mining operations, which generated $0.9 million of revenue in the prior-year period but none in 2025.

The increase in self-mining revenue

was driven by an 88% increase in the average Bitcoin price during the three months ended September 30, 2025, compared to the same period

in 2024, partially offset by a 51% increase in the average Bitcoin network difficulty level.

Energy revenues from Circle

8’s crane operations declined slightly by $0.1 million, or 1%, for the three months ended June 30, 2025, compared to the same period

The modest decrease reflects a slowdown in demand from oil and gas customers, as many exploration projects were delayed or scaled

back amid continued market uncertainty.

Key contributing factors included fluctuations in crude oil prices, softer global demand, trade-related

concerns, and higher borrowing costs, all of which impacted the pace of new project starts and the need for crane services.

Revenues from AGREE’s hotel operations increased

by $0.2 million, or 5%, for the three months ended June 30, 2025, compared to the same period in 2024.

The modest increase reflects stable

occupancy levels and consistent average daily rates, indicating steady performance in our hotel operations year-over-year.

from our lending and trading activities increased $11.6 million to approximately $1.8 million for the three months ended June 30,

2025, compared to negative $9.8 million the same period in 2024.

Revenues from our lending and trading activities were $1.8 million

for the three months ended June 30, 2025, primarily due to a $1.4 million realized gain from the sale of an investment in other

equity securities and $0.3 million in fee income during the three months ended June 30, 2025.

Revenues from our lending and trading

activities were negative $9.8 million for the three months ended June 30, 2024, primarily due to a $9.4 million unrealized loss on

2.5 million shares of White River Energy Corp.

(“White River”) common stock and a $0.5 million unrealized loss from our

investment in Alzamend included in revenue from lending and trading activities.

from our trading activities for the three months ended June 30, 2025 included net gains on equity securities, including unrealized gains

and losses from market price changes.

These gains and losses have caused, and will continue to cause, significant volatility in our periodic

8’s crane operations declined by $2.6 million, or 21%, for the three months ended September 30, 2025, compared to the same period

The decrease reflects a slowdown in demand from oil and gas customers, as many exploration projects were delayed or scaled back

amid continued market uncertainty.

Key contributing factors included fluctuations in crude oil prices, softer global demand and trade-related

concerns, all of which impacted the pace of new project starts and the need for crane services.

Revenues from AGREE’s

hotel operations increased by $0.4 million, or 7%, for the three months ended September 30, 2025, compared to the same period in 2024.

The increase reflects incremental improvements in both occupancy and average daily rates, indicating continued progress in hotel performance

year-over-year.

from our lending and trading activities decreased $5.4 million to approximately $0.1 million for the three months ended September 30,

2025, compared to $5.6 million the same period in 2024.

Revenues from our lending and trading activities were $5.6 million for the three

months ended September 30, 2024, driven primarily by $2.6 million in realized gains from trading activities, $2.6 million in fee income,

and $0.6 million in unrealized gains on investment positions.

from our trading activities for the three months ended September 30, 2025 and 2024 included net gains on equity securities, including

unrealized gains and losses from market price changes.

These gains and losses have caused, and will continue to cause, significant volatility

in our periodic earnings.

TurnOnGreen’s revenues

increased by $0.5 million, to $1.7 million for the three months ended June 30, 2025, compared to $1.2 million in the corresponding period

This rise was primarily due to higher sales from a single customer in the defense industry during the three months ended June

Other revenues decreased by

$0.3 million, to $0.5 million for the three months ended June 30, 2025, compared to $0.7 million in the corresponding period in 2024.

This decline was primarily due to lower corporate aircraft charter revenue from third parties.

increased by $0.5 million, to $1.7 million for the three months ended September 30, 2025, compared to $1.2 million in the corresponding

period in 2024.

This rise was primarily due to sales from two new customers during the three months ended September 30, 2025.

Other revenues were relatively

consistent year-over-year, totaling $0.9 million for both the three months ended September 30, 2025 and 2024.

Gross Margins

Gross margins improved to

24% for the three months ended June 30, 2025, compared to negative 21% for the same period in 2024.

The improvement was primarily driven

by the strong performance of our lending and trading activities, which positively impacted gross margins in the current period, in contrast

to their negative contribution in the prior-year period.

In both periods, gross margins were adversely affected by low or negative contributions

from our crypto asset mining operations.

Excluding the impact of lending and trading activities and crypto asset mining, adjusted gross

margins were 35% and 34% for the three months ended June 30, 2025 and 2024, respectively.

Gross margins decreased to 26% for the three months ended September

30, 2025, compared to 28% for the three months ended September 30, 2024.

The decline was primarily driven by unfavorable margins from

our crypto asset mining activities, partially offset by favorable contributions from our lending and trading activities.

Excluding the

effects of margin from our mining, lending, and trading activities adjusted gross margins for each of the three months ended September

30, 2025 and 2024 would have been 38%.

Research and Development

Research and development expenses

remained consistent at $0.1 million for both the three months ended June 30, 2025 and 2024.

decreased by $3.0 million for the three months ended September 30, 2025, due to decreased expenditures related to development work on

ROI’s Bitnile social gaming platform.

Selling and Marketing

Selling and marketing expenses were $6.3 million for the three months

ended June 30, 2025, compared to $3.7 million for the three months ended June 30, 2024, an increase of $2.6 million, or 69%.

was primarily the result of a $2.6 million increase in sales and marketing expenses at RiskOn International, Inc.

from higher advertising and promotion costs.

Selling and marketing expenses

were $7.4 million for the three months ended September 30, 2025, compared to $4.8 million for the three months ended September 30, 2024,

an increase of $2.6 million, or 55%.

The increase was primarily the result of an increase in sales and marketing expenses at ROI from

higher advertising and promotion costs.

General and Administrative

General and administrative

expenses were $9.9 million for the three months ended June 30, 2025, compared to $11.4 million for the same period in 2024, representing

a decrease of $1.5 million, or 13%.

The decrease was primarily driven by the deconsolidation of AVLP and Eco Pack, the completion and

wind-down of Ault Disruptive Technologies Corporation (“Ault Disruptive”) following the full redemption of its public shares,

and a reduction in stock-based compensation expense.

expenses were $11.3 million for the three months ended September 30, 2025, compared to $12.0 million for the same period in 2024,

representing a decrease of $0.6 million, or 5%.

The decrease was primarily driven by the deconsolidation of AVLP and Eco Pack, the completion

and wind-down of Ault Disruptive Technologies Corporation (“Ault Disruptive”) following the full redemption of its public

Impairment of Property and Equipment

On April 30, 2024, we had

a change in plan of sale for our four hotels owned and operated by AGREE.

As a result, as of April 30, 2024, the assets no longer

met the held for sale criteria and were required to be reclassified as held and used at the lower of adjusted carrying value or the fair

value at the date of the determination not to sell.

In connection with this change in plan of sale, we recorded a loss on impairment of

property and equipment related to the real estate assets of AGREE of $8.0 million during the three months ended June 30, 2024.

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.

Other Expense, Net

Other expense, net was $7.3

million for the three months ended June 30, 2025, compared to other expense, net of $12.9 million for the three months ended June

During the three months ended

September 30, 2024, due to increases in the Bitcoin mining difficulty level, which compounded the impact of the Bitcoin halving event

that occurred earlier in 2024, we concluded that an impairment triggering event had occurred.

Testing performed indicated the estimated

fair value of our miners to be less than their net carrying value as of September 30, 2024, and an impairment charge of $10.5 million

was recognized, decreasing the net carrying value of our crypto assets mining equipment to their estimated fair value.

In addition, we recorded $1.2

million in impairment charges related to real estate assets of AGREE during the three months ended September 30, 2024.

Other Income (Expense), Net

Other income, net was $0.7

million for the three months ended September 30, 2025, compared to other expense, net of $7.2 million for the three months ended

September 30, 2024.

Interest and other income

totaled $1.1 million and $0.7 million for the three months ended June 30, 2025 and 2024, respectively.

totaled $0.6 million and $0.8 million for the three months ended September 30, 2025 and 2024, respectively.

Interest expense totaled $3.1

million for the three months ended June 30, 2025, compared to $5.3 million for the same period in 2024.

The increase was primarily driven

by higher amortization of debt discount associated with new convertible notes issued during the second quarter of 2025.

These notes included

embedded derivative features and incurred transaction-related costs, which contributed to the higher non-cash interest expense recognized

during the period.

Cumulative downward adjustments

for impairments for our equity securities without readily determinable fair values held at were $6.3 million for the three months ended

June 30, 2024.

No such impairments were recognized during the three months ended June 30, 2025.

million for the three months ended September 30, 2025, compared to $7.8 million for the same period in 2024.

Interest expense is lower

due to lower debt balances as well as lower forbearance fees and amortization of debt discount.

the three months ended September 30, 2025, we recognized a gain of $2.7 million in connection with the bankruptcy proceedings for a subsidiary

We deconsolidated the subsidiary as we determined that we no longer maintained a controlling financial interest in the subsidiary.

The gain recognized reflects the derecognition of the subsidiary’s remaining assets, liabilities, and equity balances.

the three months ended September 30, 2025, we recognized a gain on extinguishment of debt of $1.1 million related to the pay-off of an

ROI note payable.

the three months ended September 30, 2025, we recognized a loss on the sale of fixed assets of $0.7 million in connection with the sale

of equipment at Circle 8.

Income Tax Provision

Our effective tax rate from

continuing operations was a benefit of 0.7% for the three months ended June 30, 2025, compared to 0.0% for the same period in 2024.

recorded an income tax benefit of $0.1 million and $4,000 for the three months ended June 30, 2025 and 2024, respectively.

Results of Operations for the Six Months Ended June 30, 2025 and

continuing operations was a provision of 1.9% for the three months ended September 30, 2025, compared to 0.2% for the same period in 2024.

We recorded an income tax provision of $0.3 million and $0.1 million for the three months ended September 30, 2025 and 2024, respectively.

Results of Operations for the Nine Months Ended September 30, 2025

The following table summarizes

the results of our operations for the six months ended June 30, 2025 and 2024.

For the Six Months Ended June 30,

the results of our operations for the nine months ended September 30, 2025 and 2024.

For the Nine Months Ended September 30,

Revenue, crane operations

11 unchanged sentences

Operating expenses

Research and development

Selling and marketing

General and administrative

Selling and marketing

Research and development

Impairment of property and equipment

19 unchanged sentences

(57,402,000 )

Income tax benefit

Income tax provision

Net loss from continuing operations

4 unchanged sentences

(58,228,000 )

Net income attributable to non-controlling interest

Net loss (income) attributable to non-controlling interest

Net loss attributable to Hyperscale Data

9 unchanged sentences

$ (59,653,000 )

Other comprehensive (loss) income

Other comprehensive income (loss)

Foreign currency translation adjustment

4 unchanged sentences

Revenues by business category

for the six months ended June 30, 2025 and 2024 were as follows:

For the Six Months Ended June 30,

for the nine months ended September 30, 2025 and 2024 were as follows:

For the Nine Months Ended September 30,

Revenue, crypto assets mining

5 unchanged sentences

$ (12,014,000 )

n/m - not meaningful

Revenues from Sentinum’s

crypto assets mining operations decreased $10.1 million to $9.9 million for the six months ended June 30, 2025, compared to $19.9 million

for the six months ended June 30, 2024.

The decrease was due primarily to a $5.3 million decline in revenue from mined crypto assets

at Sentinum owned and operated facilities coupled with a $4.7 million decline in revenue from Sentinum crypto mining equipment hosted

at third-party facilities.

The $5.3 million decrease in revenue from mined crypto assets at Sentinum owned and operated facilities was

due to the April 2024 Bitcoin halving event that occurred on the Bitcoin network and a 42% increase in the average Bitcoin mining difficulty

level, partially offset by a 61% increase in the average Bitcoin price for the six months ended June 30, 2025, compared to the corresponding

period in 2024.

crypto assets mining operations decreased $9.6 million to $15.6 million for the nine months ended September 30, 2025, compared to $25.2

million for the nine months ended September 30, 2024.

The decrease was due primarily to a $4.0 million decline in revenue from mined

crypto assets at Sentinum owned and operated facilities coupled with a $5.6 million decline in revenue from Sentinum crypto mining equipment

hosted at third-party facilities.

The $4.0 million decrease in revenue from mined crypto assets at Sentinum owned and operated facilities

was due to the April 2024 Bitcoin halving event that occurred on the Bitcoin network and a 45% increase in the average Bitcoin mining

difficulty level, partially offset by a 70% increase in the average Bitcoin price for the nine months ended September 30, 2025, compared

to the corresponding period in 2024.

No revenue was generated from third-party hosted mining operations in 2025.

Energy revenues from Circle

8’s crane operations grew by $0.7 million, or 3%, for the six months ended June 30, 2025, compared to the same period in 2024.

increase was driven by a strong start to the year, as oil and gas companies launched new projects amid renewed optimism following the

presidential inauguration.

However, this early momentum slowed in the second quarter as broader economic pressures and uncertainty in

commodity markets dampened demand for crane services.

Revenues from AGREE’s hotel operations increased

by $0.4 million, or 5%, for the six months ended June 30, 2025, compared to the same period in 2024.

The modest increase reflects stable

occupancy levels and consistent average daily rates, indicating steady performance in our hotel operations year-over-year.

from our lending and trading activities decreased $2.5 million to approximately $1.8 million for the six months ended June 30, 2025, compared

to the same period in 2024, primarily due to a $1.4 million realized gain from the sale of an investment in other equity securities and

$0.3 million in fee income during the six months ended June 30, 2025.

Revenues from our lending and trading activities were negative $0.7

million for the three months ended June 30, 2024, primarily due to a $0.4 million unrealized loss from our investment in Alzamend included

in revenue from lending and trading activities.

from our trading activities for the six months ended June 30, 2025 included net gains on equity securities, including unrealized gains

and losses from market price changes.

These gains and losses have caused, and will continue to cause, significant volatility in our periodic

8’s crane operations declined by $1.9 million, or 5%, for the nine months ended September 30, 2025, compared to the same period

The decrease reflects a slowdown in demand from oil and gas customers, as many exploration projects were delayed or scaled back

amid continued market uncertainty.

Key contributing factors included fluctuations in crude oil prices, softer global demand and trade-related

concerns, all of which impacted the pace of new project starts and the need for crane services.

Revenues from AGREE’s

hotel operations increased by $0.8 million, or 6%, for the nine months ended September 30, 2025, compared to the same period in 2024.

The increase reflects incremental improvements in both occupancy and average daily rates, indicating continued progress in hotel performance

year-over-year.

from our lending and trading activities decreased $3.0 million to approximately $1.9 million for the nine months ended September 30, 2025,

compared to the same period in 2024.

The decrease was primarily attributable to lower realized gains from trading activities and a reduction

in fee-generating transactions during the current period.

Revenues for the nine months ended September 30, 2025, included a $1.5 million

realized gain from the sale of an investment in other equity securities and $0.3 million in fee income, compared to $2.5 million in realized

gains from trading activities and $2.3 million in fee income during the nine months ended September 30, 2024.

from our trading activities for the nine months ended September 30, 2025 and 2024 included net gains on equity securities, including unrealized

gains and losses from market price changes.

These gains and losses have caused, and will continue to cause, significant volatility in

our periodic earnings.

TurnOnGreen’s revenues

increased by $0.8 million, to $3.3 million for the six months ended June 30, 2025, compared to $2.5 million in the corresponding

increased by $1.3 million, to $5.0 million for the nine months ended September 30, 2025, compared to $3.8 million in the corresponding

period in 2024.

This rise was primarily due to higher sales from a single customer in the defense industry during the six months ended

June 30, 2025.

This increase was primarily due to higher sales from two new customers during the nine months ended September 30, 2025.

Other revenues increased by

$0.2 million, to $1.2 million for the six months ended June 30, 2025, compared to $1.0 million in the corresponding period in 2024.

rise was primarily due to higher corporate aircraft charter revenue from third parties.

$0.2 million, to $2.1 million for the nine months ended September 30, 2025, compared to $1.9 million in the corresponding period

This increase was primarily due to higher corporate aircraft charter revenue from third parties.

Gross Margins

Gross margins decreased to

22% for the six months ended June 30, 2025, compared to 26% for the same period in 2024.

The decline was primarily driven by unfavorable

margins from our crypto asset mining operations, partially offset by favorable contributions from our lending and trading activities.

Gross margins of 22% for the six months ended June 30, 2025 reflected a similar mix of negative mining performance and positive trading

Excluding the impact of lending and trading activities and crypto asset mining, adjusted gross margins for the six months ended

June 30, 2025 and 2024 would have been 35% and 34%, respectively.

Gross margins decreased to 24% for the nine months ended September

30, 2025, compared to 26% for the same period in 2024.

The decline was primarily driven by unfavorable margins from our crypto asset mining

operations, partially offset by favorable contributions from our lending and trading activities.

Excluding the impact of lending and trading

activities and crypto asset mining, adjusted gross margins for the nine months ended September 30, 2025 and 2024 would have been 36% for

both periods.

Research and Development

Research and development expenses

remained consistent at $0.2 million for both the six months ended June 30, 2025 and 2024.

decreased by $3.0 million for the nine months ended September 30, 2025, due to decreased expenditures related to development work on ROI’s

Bitnile social gaming platform.

Selling and Marketing

Selling and marketing expenses

were $8.6 million for the six months ended June 30, 2025, compared to $7.8 million for the six months ended June 30, 2024, an increase

of $0.8 million, or 11%.

The increase was primarily the result of a $1.0 million increase in sales and marketing expenses at ROI from

were $16.0 million for the nine months ended September 30, 2025, compared to $12.5 million for the nine months ended September 30, 2024,

an increase of $3.5 million, or 28%.

The increase was primarily the result of an increase in sales and marketing expenses at ROI from

higher advertising and promotion costs.

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General and administrative

expenses were $19.1 million for the six months ended June 30, 2025, compared to $21.7 million for the six months ended June 30, 2024,

expenses were $30.4 million for the nine months ended September 30, 2025, compared to $33.7 million for the nine months ended September

30, 2024, a decrease of $3.3 million.

The decrease was primarily driven by the deconsolidation of AVLP and Eco Pack, the completion and wind-down

of Ault Disruptive following the full redemption of its public shares, and a reduction in stock-based compensation expense.

The decrease was primarily driven by the deconsolidation of AVLP and Eco Pack, the completion and

wind-down of Ault Disruptive following the full redemption of its public shares, lower salaries and benefits, lower performance-based

bonuses at Ault Lending and a reduction in stock-based compensation 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 impact of the Bitcoin halving event

that occurred earlier in 2024, we concluded that an impairment triggering event had occurred.

Testing performed indicated the estimated

fair value of our miners to be less than their net carrying value as of September 30, 2024, and an impairment charge of $10.5 million

was recognized, decreasing the net carrying value of our crypto assets mining equipment to their estimated fair value.

On April 30, 2024, we had

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In connection with this change in plan of sale, we recorded a loss on impairment of

property and equipment related to the real estate assets of AGREE of $8.0 million during the six months ended June 30, 2024.

property and equipment related to the real estate assets of AGREE of $9.2 million during the nine months ended September 30, 2024.

fair values of property and equipment related to the real estate assets of AGREE were based on a discounted cash flow income approach

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Other expense, net was $4.9

million for the six months ended June 30, 2025, compared to other expense, net of $2.3 million for the six months ended June 30,

million and $9.5 million for the nine months ended September 30, 2025 and 2024, respectively.

Interest and other income

totaled $1.3 million and $1.2 million for the six months ended June 30, 2025 and 2024, respectively.

Interest expense was $11.5 million for the six months ended June 30,

2025, a slight increase from $11.0 million for the same period in 2024.

For the six months ended June

30, 2024, we recognized a noncash gain of $17.9 million related to the conversion of White River common stock by ROI into marketable equity

During the period, ROI transferred 6.7 million shares of White River common stock with a fair value of $19.2 million at the

date of transfer.

In connection with these transfers, ROI converted a portion of its White River Series A convertible preferred stock

into common stock.

No such gains were recognized during the six months ended June 30, 2025.

the six months ended June 30, 2025, we recognized a total net loss on extinguishment of convertible notes of $4.6 million.

· 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;

totaled $2.0 million and $2.1 million for the nine months ended September 30, 2025 and 2024, respectively.

Interest expense totaled $14.6

million for the nine months ended September 30, 2025, compared to $18.8 million for the same period in 2024.

Interest expense is lower

due to lower debt balances as well as lower forbearance fees and amortization of debt discount.

For the nine months ended

September 30, 2024, we recognized a noncash gain of $17.9 million related to the conversion of White River common stock by ROI into marketable

equity securities.

During the period, ROI transferred 6.7 million shares of White River common stock with a fair value of $19.2 million

at the date of transfer.

In connection with these transfers, ROI converted a portion of its White River Series A convertible preferred

stock into common stock.

No such gains were recognized during the nine months ended September 30, 2025.

the nine months ended September 30, 2025, we recognized a total net loss on extinguishment of convertible notes of $3.4 million.

This amount includes:

· A loss of $2.6 million was recognized in connection with the February 25, 2025 issuance of an amended

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· A loss of $1.3 million related to a 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

· A loss of $1.0 million related to a 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

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of $1.0 million was recognized;

· A loss of $1.3 million related to a 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

During the six months ended

June 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.

During the three months ended June 30, 2024, holders of our convertible

notes converted $2.0 million of convertible notes that had a fair value of $2.7 million at the time of conversion and recognized a $0.7

million loss on extinguishment of debt.

· 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.

During the nine months ended

September 30, 2024, the holder of ROI convertible notes converted $2.3 million of their 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.

During the three months

ended September 30, 2024, holders of our convertible notes converted $2.0 million of convertible notes that had a fair value of $2.7 million

at the time of conversion and recognized a $0.7 million loss on extinguishment of debt.

the three months ended September 30, 2025, we recognized a gain on extinguishment of debt of $1.1 million related to the pay-off of an

ROI note payable.

Loss from investment in unconsolidated

entity was $1.3 million for the six months ended June 30, 2024, representing our share of losses from our equity method investment in

Algorhythm Holdings, Inc.

On March 28, 2025, AVLP, formerly a

majority-owned subsidiary of ours, filed a voluntary petition for liquidation under Chapter 7 of the U.S.

entity was $1.3 million for the nine months ended September 30, 2024, representing our share of losses from our equity method investment

in Algorhythm Holdings, Inc.

On March 28, 2025, AVLP, formerly

a majority-owned subsidiary of ours, filed a voluntary petition for liquidation under Chapter 7 of the U.S.

Bankruptcy Code.

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In connection with the deconsolidation, we recognized a gain of

$10.0 million, which is included in the condensed consolidated statement of operations for the six months ended June 30, 2025.

April 16, 2025, Eco Pack, formerly a majority-owned subsidiary of ours, filed a voluntary liquidation under the insolvency regulations in the UK.

$10.0 million, which is included in the condensed consolidated statement of operations for the nine months ended September 30, 2025.

April 16, 2025, Eco Pack, formerly a majority-owned subsidiary of ours, filed a voluntary liquidation under the insolvency regulations

As a result of the filing, we no longer maintained a controlling financial interest.

Accordingly, we deconsolidated Eco Pack effective

as of the filing date.

In connection with the deconsolidation, we recognized a loss of $0.4 million, which is included in the condensed

consolidated statement of operations for the six months ended June 30, 2025.

During the six months ended June 30, 2024, we recorded a $3.1 million

loan loss reserve related to the promissory note from Ault & Company due to uncertainties surrounding collection.

The reserve was

recorded within provision for loan losses – related party.

Accordingly, we deconsolidated Eco Pack

effective as of the filing date.

In connection with the deconsolidation, we recognized a loss of $0.4 million, which is included in the

condensed consolidated statement of operations for the nine months ended September 30, 2025.

the three months ended September 30, 2025, we recognized a gain of $2.7 million in connection with the bankruptcy proceedings for a subsidiary

We deconsolidated the subsidiary as we determined that we no longer maintained a controlling financial interest in the subsidiary.

The gain recognized reflects the derecognition of the subsidiary’s remaining assets, liabilities, and equity balances.

Cumulative downward adjustments

for impairments for our equity securities without readily determinable fair values held at were $6.3 million for the nine months ended

September 30, 2024.

During the nine months ended

September 30, 2024, we recorded a $3.1 million loan loss reserve related to the promissory note from Ault & Company due to uncertainties

surrounding collection.

The reserve was recorded within provision for loan losses – related party.

Income Tax Provision

Our effective tax rate from

continuing operations was a benefit of 0.3% for the six months ended June 30, 2025, compared to 0.0% for the same period in 2024.

an income tax benefit of $0.1 million and $5,000 for the six months ended June 30, 2025 and 2024, respectively.

continuing operations was a provision of 0.5% for the nine months ended September 30, 2025, compared to 0.1% for the same period in 2024.

We recorded an income tax provision of $0.2 million and $47,000 for the nine months ended September 30, 2025 and 2024, respectively.

Liquidity and Capital Resources

As of June 30, 2025, we had

cash and cash equivalents of $5.9 million, excluding restricted cash of $21.3 million, compared to $4.5 million in cash and cash equivalents

and $20.5 million in restricted cash as of December 31, 2024.

The increase in cash and cash equivalents was primarily driven by cash inflows

from financing activities, including the sale of preferred stock and proceeds from notes payable and convertible notes.

These inflows

were partially offset by cash used in operating activities, debt repayments and purchases of property and equipment.

As of September 30, 2025,

we had cash and cash equivalents of $24.8 million, excluding restricted cash of $22.8 million, compared to $4.5 million in cash and cash

equivalents, excluding $20.5 million in restricted cash, as of December 31, 2024.

The increase in cash and cash equivalents was primarily

driven by cash inflows from financing activities, including the sale of common stock, preferred stock and proceeds from notes payable

and convertible notes.

These inflows were partially offset by cash used in operating activities, debt repayments and purchases of property

and equipment.

Net cash used in operating

activities totaled $7.1 million for the six months ended June 30, 2025, compared to $13.9 million for the six months ended June 30,

Cash used in operating activities for the six months ended June 30, 2025 included $9.9 million proceeds from the sale of crypto

assets from our Sentinum crypto assets mining operations, offset by operating losses and changes in working capital.

Net cash used in

operating activities for the six months ended June 30, 2024 included $3.8 million cash used in operating activities from discontinued

activities totaled $24.8 million for the nine months ended September 30, 2025, compared to $10.2 million for the nine months ended

September 30, 2024.

Cash used in operating activities for the nine months ended September 30, 2025 included $13.1 million proceeds

from the sale of crypto assets from our Sentinum crypto assets mining operations and $4.0 million proceeds from the sale of an investment

in equity securities, offset by operating losses and changes in working capital.

Net cash used in operating activities for the nine months

ended September 30, 2024 included $6.4 million cash used in operating activities from discontinued operations.

Net cash used in investing

activities was $2.3 million for the six months ended June 30, 2025, compared to net cash used in investing activities of $3.8 million

for the six months ended June 30, 2024.

Net cash used investing activities for the six months ended June 30, 2025 included capital expenditures

of $3.3 million partially offset by proceeds from collections on notes receivable, related party of $1.9 million.

Net cash used in

investing activities for the six months ended June 30, 2024 included $1.6 million cash provided by investing activities from discontinued

activities was $12.9 million for the nine months ended September 30, 2025, compared to net cash used in investing activities of $11.8

million for the nine months ended September 30, 2024.

Net cash used in investing activities for the nine months ended September 30, 2025

· $7.6 million investments in notes receivable, related party, offset by $2.5 million collections of notes

receivable, related party;

· $6.1 million capital expenditures;

· $4.2 million purchases of crypto assets;

· $1.5 million investments in loans receivable;

· $2.4 million proceeds from the sale of fixed assets;

· $1.3 million proceeds from the sale of investments in common stock, related party.

Net cash used in investing

activities for the nine months ended September 30, 2024 included $3.8 million cash provided by investing activities from discontinued

Net cash provided by financing

activities was $11.6 million for the six months ended June 30, 2025, compared to $18.8 million for the six months ended June 30,

activities was $60.4 million for the nine months ended September 30, 2025, compared to $22.6 million for the nine months ended September

30, 2024, and primarily reflects the following transactions:

• $29.1 million gross proceeds from notes payable, offset by $30.2 million payments on notes payable;

· $37.6 million net proceeds from the sale of Class A common stock;

· $23.9 million gross proceeds from sales of Series B preferred stock;

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notes payable;

· $5.0 million gross proceeds from sales of Series G preferred stock

and Series H preferred stock, related party.

· $3.5 million gross proceeds from sales of Series D preferred stock;

· $49.5 million payments on notes payable, offset by $41.1 million gross proceeds from notes payable;

· $6.3 million payments of preferred dividends.

• $0.9 million gross proceeds from sales of Series G preferred stock,

related party.

Net cash provided by financing

activities for the six months ended June 30, 2024 included $1.3 million cash provided by financing activities from discontinued operations.

Financing Transactions Subsequent to June

activities for the nine months ended September 30, 2024 included $2.6 million cash provided by financing activities from discontinued

Financing Transactions Subsequent to September

Sales of Series B Convertible Preferred Stock

From July 1, 2025 through

August 14, 2025, we sold a total of 10,955 shares of our Series B convertible preferred stock for cash totaling $11.0 million.

From October 1, 2025 through

November 17, 2025, we sold a total of 8,500 shares of our Series B convertible preferred stock for cash totaling $8.5 million.

Issuance of Class A Common Stock pursuant to

the ATM Offering

From October 1, 2025 through

November 4, 2025, we received gross proceeds of $86.2 million through the sale of 172.7 million shares of our Class A common stock

through the ATM offering.

Critical Accounting Estimates

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What changed 10-Q

Item 2. Management’s Discussion and Analysis