What changed in this filing

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Item 1. Financial Statements

2026-05-18 compared with 2025-11-17 · 409 added, 1167 removed, 581 unchanged (73% of the section changed)

3 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

September 30,

CURRENT ASSETS

2 unchanged sentences

Accounts receivable, net

Investment in promissory notes and other, related party

Loans receivable, current

Crypto assets

Prepaid expenses and other current assets

TOTAL CURRENT ASSETS

Crypto assets

Crypto assets, restricted

Intangible assets, net

17 unchanged sentences

Notes payable, non-current

Convertible notes payable, non-current

Other long-term liabilities

TOTAL LIABILITIES

4 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS (continued)

September 30,

COMMITMENTS AND CONTINGENCIES

1 unchanged sentence

Preferred stock, $ 0.001 par value - 25,000,000 shares authorized;

2,296,188 and 2,029,450 shares issued and outstanding at September 30, 2025 and December 31, 2024, respectively (liquidation preference of $ 87,025,000 as of September 30, 2025)

2,301,686 and 2,299,188 shares issued and outstanding at March 31, 2026 and December 31, 2025, respectively (liquidation preference of $ 90,088,000 as of March 31, 2026)

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

130,594,602 and 1,259,893 shares issued and outstanding at September 30, 2025 and December 31, 2024, respectively

370,193,806 and 323,405,790 shares issued and outstanding at March 31, 2026 and December 31, 2025, respectively

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

4,989,166 and 4,998,597 shares issued and outstanding at September 30, 2025 and December 31, 2024, respectively

24,153,493 and 24,386,850 shares issued and outstanding at March 31, 2026 and December 31, 2025, respectively

Additional paid-in capital

2 unchanged sentences

( 734,560,000 )

Accumulated other comprehensive loss

Treasury stock, at cost

( 30,571,000 )

Accumulated other comprehensive income

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 September 30,

For the Nine Months Ended September 30,

Revenue, crane operations

Revenue, defense solutions

Revenue, crypto assets mining

4 unchanged sentences

Cost of revenue, crane operations

Cost of revenue, defense solutions

Cost of revenue, crypto assets mining

7 unchanged sentences

Research and development

Impairment of property and equipment

Change in fair value of crypto assets

Total operating expenses

2 unchanged sentences

( 6,384,000 )

( 30,568,000 )

( 47,869,000 )

Other income (expense):

Other (expense) income:

Interest and other income

2 unchanged sentences

( 3,839,000 )

( 14,566,000 )

( 18,825,000 )

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

Change in fair value of crypto assets, restricted

Gain (loss) on extinguishment of debt

( 4,569,000 )

Loss from investment in unconsolidated entity

( 1,958,000 )

Impairment of equity securities

( 6,266,000 )

Change in fair value of embedded derivative liabilities

Gain on deconsolidation of subsidiary

Provision for loan losses, related party

( 3,068,000 )

(Loss) gain on the sale of fixed assets

( 1,291,000 )

Total other income (expense), net

( 7,208,000 )

( 4,894,000 )

Loss on the sale of fixed assets

Total other (expense) income, net

( 8,646,000 )

2 unchanged sentences

( 4,664,000 )

( 35,462,000 )

( 57,402,000 )

Income tax provision

Net loss from continuing operations

( 30,136,000 )

( 4,723,000 )

( 35,643,000 )

( 57,449,000 )

Net income (loss) from discontinued operations

( 13,582,000 )

( 29,639,000 )

( 35,643,000 )

( 58,228,000 )

Net loss (income) attributable to non-controlling interest

Net income attributable to non-controlling interest

Net loss attributable to Hyperscale Data

1 unchanged sentence

( 4,205,000 )

( 36,269,000 )

( 55,759,000 )

Preferred dividends

1 unchanged sentence

( 1,966,000 )

( 6,424,000 )

( 3,894,000 )

Net loss available to common stockholders

$ ( 15,256,000 )

$ ( 26,875,000 )

Net loss attributable to common stockholders

$ ( 32,456,000 )

$ ( 6,171,000 )

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

Continuing operations

Discontinued operations

Net loss per common share

Basic and diluted net loss per common share

Weighted average basic and diluted common shares outstanding

Comprehensive loss

Net loss available to common stockholders

$ ( 15,256,000 )

$ ( 26,875,000 )

Comprehensive (loss) income

Net loss attributable to common stockholders

$ ( 32,456,000 )

5 unchanged sentences

$ ( 6,165,000 )

$ ( 42,687,000 )

$ ( 60,274,000 )

The accompanying notes are an integral part of

4 unchanged sentences

IN STOCKHOLDERS’ EQUITY

Three Months Ended September 30, 2025

Three Months Ended March 31, 2026

Preferred Stock

Comprehensive

Stockholders’

BALANCES, July 1, 2025

BALANCES, January 1, 2026

$ 853,156,000

1 unchanged sentence

$ 125,857,000

Issuance of Series H preferred stock, related party

Issuance of Series B preferred stock for cash

Issuance of Series D

preferred stock for cash

Class B common stock converted into Class A common stock

2 unchanged sentences

Financing cost in connection with sales of Class A common stock

( 1,248,000 )

Issuance of Class A common stock for conversion of debt

Net loss attributable to Hyperscale Data

10 unchanged sentences

Series H preferred dividends ($23.75 per share)

Conversion of Series B preferred stock to Class A common stock

Net income attributable to non-controlling interest

BALANCES, September 30, 2025

$ 758,121,000

$ ( 702,214,000 )

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, 2024

A Common Stock

Comprehensive

Stockholders’

BALANCES, July 1, 2024

$ 660,071,000

$ ( 600,282,000 )

$ ( 2,497,000 )

$ ( 440,000 )

$ ( 30,571,000 )

Issuance of Series C preferred stock, related party for cash

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

related party

Stock-based compensation

Issuance of Class A common stock for conversion of debt

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

Net loss attributable to Hyperscale Data

( 25,549,000 )

Series A preferred dividends ($0.63 per share)

Series C preferred dividends ($24.05 per share)

( 1,059,000 )

Series D preferred dividends ($0.81 per share)

Foreign currency translation adjustments

Net income attributable to non-controlling interest

( 2,861,000 )

Deconsolidation of subsidiary

BALANCES, September 30, 2024

$ 661,644,000

$ ( 627,124,000 )

BALANCES, March 31, 2026

$ 863,607,000

1 unchanged sentence

$ 102,907,000

The accompanying notes are an integral part of these

unaudited condensed consolidated financial statements.

The accompanying notes are an integral part of these unaudited

condensed consolidated financial statements.

HYPERSCALE DATA, INC.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES

IN STOCKHOLDERS’ EQUITY

Nine Months Ended September 30, 2025

A Common Stock

B Common Stock

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’

Three Months Ended March 31, 2025

Preferred Stock

Comprehensive

6 unchanged sentences

$ ( 30,571,000 )

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 H preferred stock, related party

Issuance of Series B preferred stock for cash

Issuance of Series D preferred stock for cash

Class B common stock converted into Class A common stock

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 cash

Financing cost in connection with sales of Class A common stock

( 1,248,000 )

Conversion of convertible notes payable to Class A common stock

Issuance of Class A common stock for conversion of debt

Net loss attributable to Hyperscale Data

2 unchanged sentences

Series A preferred dividends ($0.62 per share)

Series B preferred dividends ($44.73 per share)

Series C preferred dividends ($23.57 per share)

2 unchanged sentences

Series D preferred dividends ($1.06 per share)

( 1,333,000 )

Series E preferred dividends ($0.57 per share)

( 1,318,000 )

Series G preferred dividends ($44.32 per share)

Series H preferred dividends ($7.39 per share)

Conversion of Series B preferred stock to Class A common stock

Retirement of treasury stock

1 unchanged sentence

Foreign currency translation adjustments

Net income attributable to non-controlling interest

Deconsolidation of subsidiary

BALANCES, September 30, 2025

$ 758,121,000

$ ( 702,214,000 )

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, 2024

A Common Stock

Comprehensive

Stockholders’

BALANCES, January 1, 2024

$ 644,856,000

$ ( 567,469,000 )

$ ( 2,097,000 )

$ ( 30,571,000 )

Issuance of Series C preferred stock, related party for cash

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

related party

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 debt

Increase in ownership interest of subsidiary

Sale of subsidiary stock to non-controlling interests

Distribution to Circle 8 non-controlling interest

Conversion of RiskOn International Inc.

(“ROI”) convertible

Net loss attributable to Hyperscale Data

( 55,759,000 )

Series A preferred dividends ($1.88 per share)

Series C preferred dividends ($71.22 per share)

( 3,091,000 )

Series D preferred dividends ($2.44 per share)

Foreign currency translation adjustments

Net income attributable to non-controlling interest

( 2,469,000 )

Distribution of securities of TurnOnGreen, Inc.

(“TurnOnGreen”)

to Hyperscale Data Class A common stockholders ($2.02 per share)

( 4,900,000 )

Distribution of ROI investment in White River Energy Corp.

River”) to ROI stockholders

( 19,210,000 )

Net loss attributable to non-controlling interest

Deconsolidation of subsidiary

BALANCES, September 30, 2024

$ 661,644,000

$ ( 627,124,000 )

$ ( 1,222,000 )

BALANCES, March 31, 2025

$ 672,082,000

$ ( 665,692,000 )

The accompanying notes are

an integral part of these unaudited condensed consolidated financial statements.

The accompanying notes are an integral part of these unaudited

condensed consolidated financial statements.

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 operating activities:

1 unchanged sentence

$ ( 4,723,000 )

Net loss from discontinued operations

Net loss from continuing operations

( 35,643,000 )

( 57,449,000 )

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

3 unchanged sentences

Stock-based compensation

Loss (gain) on the sale of fixed assets

Impairment of property and equipment

Impairment of equity securities

Loss on the sale of fixed assets

Revenue, crypto assets mining

2 unchanged sentences

Proceeds from the sale of crypto assets

Realized gains on sale of marketable securities

( 7,463,000 )

Realized losses on non-marketable equity securities

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

Change in fair value of crypto assets and crypto assets, restricted

Realized gains on non-marketable equity securities

( 1,422,000 )

Proceeds from the sale of investment in equity securities

Gain on the sale of equity securities

Change in fair value of embedded derivatives

( 1,324,000 )

Loss from investment in unconsolidated entity

Provision for loan losses, related party

Loss (gain) on extinguishment of debt

(Gain) loss on extinguishment of debt

Gain on deconsolidation of subsidiary

( 10,049,000 )

( 2,350,000 )

( 1,122,000 )

Other operating activities

Changes in operating assets and liabilities:

1 unchanged sentence

Accounts receivable

( 2,486,000 )

( 3,021,000 )

Prepaid expenses and other current assets

1 unchanged sentence

Accounts payable and accrued expenses

( 2,738,000 )

Lease liabilities

( 1,124,000 )

( 1,364,000 )

Net cash used in operating activities from continuing operations

( 24,808,000 )

( 3,857,000 )

Net cash used in operating activities from discontinued operations

( 6,366,000 )

Net cash used in operating activities

( 3,959,000 )

( 10,223,000 )

Cash flows from investing activities:

4 unchanged sentences

( 3,760,000 )

Cash decrease upon deconsolidation of subsidiary

Investments in loans receivable

( 2,871,000 )

Proceeds from the sale of fixed assets

Proceeds from sale of investments in common stock, related party

Investment in notes receivable, related party

( 7,556,000 )

( 3,413,000 )

Principal payments on loans receivable

Payments from notes receivable, related party

Net cash used in investing activities from continuing operations

( 12,934,000 )

( 8,047,000 )

Net cash used in investing activities from discontinued operations

Collections on loans receivable

Investments in non-marketable equity securities

( 7,749,000 )

Proceeds from the sale of property and equipment

Investment in notes receivable, related party

Collections on notes receivable, related party

Other investing activities

Net cash used in investing activities

4 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 financing activities:

Gross proceeds from sales of Class A common stock

Financing cost in connection with sales of Class A common stock

( 1,248,000 )

Proceeds from sales of Series B preferred stock

Offering costs related to issuance of Class A common stock

Proceeds from sales of Series D preferred stock

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

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

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

Distribution to Circle 8 non-controlling interest

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

Proceeds from notes payable

2 unchanged sentences

( 13,794,000 )

Payments on convertible notes payable, related party

Proceeds from notes payable, related party

Payments on notes payable, related party

Repayments of related party notes payable

( 1,685,000 )

Proceeds from related party notes payable

Payments of preferred dividends

1 unchanged sentence

( 1,966,000 )

Proceeds from sales of convertible notes

Proceeds from issuance of convertible notes

Payments on convertible notes

( 1,350,000 )

( 1,280,000 )

Net cash provided by financing activities from continuing operations

Net cash provided by financing activities from discontinued operations

Net cash provided by financing activities

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

Net increase in cash and cash equivalents and restricted cash

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

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

Cash and cash equivalents and restricted cash at beginning of period

Cash and cash equivalents and restricted cash at end of period

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

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

Effect of exchange rate changes on cash and cash equivalents

Net decrease in cash and cash equivalents and restricted cash

( 12,929,000 )

Cash, cash equivalents and restricted cash at beginning of period

Cash, cash equivalents and restricted cash at end of period

Supplemental disclosures of cash flow information:

Cash paid during the period for interest - continuing operations

Cash paid during the period for interest - discontinued operations

Cash paid for interest

Non-cash investing and financing activities:

Settlement of accounts payable with crypto assets

Settlement of interest payable with crypto assets

Settlement of note payable with crypto assets

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

Conversion of Series B preferred stock into shares of Class A common stock

Conversion of debt and equity securities to marketable securities

2 unchanged sentences

Notes payable exchanged for convertible notes payable

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

Paid-in-kind dividends settled through issuance of Series B preferred stock

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

Property and equipment acquired through note payable financing

DESCRIPTION OF BUSINESS

Hyperscale Data, Inc.

Data” or the “Company”) is a Delaware corporation that 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.

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

The Company anticipates completing the planned divestiture of ACG in 2026, at which time Hyperscale Data expects to operate

as a focused AI data center and Bitcoin infrastructure company.

(“Hyperscale Data” or the “Company”)

is a Delaware corporation whose principal operations consist of owning and operating data center infrastructure supporting digital asset

mining operations.

While the Company has completed initial deployments supporting high-density computing workloads for third-party customers,

its current operations are primarily focused on Bitcoin mining and the accumulation of digital assets, primarily through its wholly owned

subsidiary, Sentinum, Inc.

(“Sentinum”), which operates facilities providing power and related infrastructure.

Through another of its wholly owned subsidiaries, Ault Capital Group,

(“Ault Capital”), the Company holds a portfolio of diversified businesses and strategic investments spanning commercial

lending and trading, hotel operations, crane rental, software platforms and commercial electronics.

The Company anticipates completing

the planned divestiture of Ault Capital in 2027, at which time it expects to operate as a more focused data center infrastructure-oriented

The Company has the following

reportable segments:

· Sentinum – crypto asset mining operations, colocation and hosting services for emerging artificial

intelligence (“AI”) ecosystems and other industries, and the Company’s digital asset treasury activities;

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

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

· Sentinum, Inc.

(“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;

· Gresham Worldwide, Inc.

(“Gresham”) – defense solutions;

· Ault Global Real Estate Equities, Inc.

1 unchanged sentence

real estate holdings:

LIQUIDITY AND FINANCIAL CONDITION

of September 30 , 2025, the Company had cash and cash equivalents of $ 24.8

million (excluding restricted cash of $ 22.8 million)

and negative working capital of $ 89.4 million .

The Company has historically financed its operations through the issuance of convertible debt, promissory notes and equity securities.

The Company’s working

capital position improved from negative $ 157.1 million at December 31, 2024 to negative $ 89.4 million at September 30, 2025, and was further

strengthened subsequent to September 30, 2025, through the sale of 172.7 million shares of Class A common stock pursuant to the 2025 “At-the-Market”

(“ATM”) offering for gross proceeds of $ 86.2 million and the sale of 8,500 shares of its Series B Convertible Preferred Stock

for gross proceeds of approximately $ 8.5 million.

These capital raises, together with the conversion of $ 2.3 million in aggregate principal

and accrued interest of existing convertible debt into Class A common stock, have enhanced liquidity, reduced debt obligations and provided

additional capital to support ongoing operations and planned growth initiatives.

In connection with the preparation

of these financial statements, management performed an analysis of the Company’s financial position and working capital projections

for at least the next twelve months following the issuance of these financial statements.

Based on this analysis, and considering the

proceeds received from recent financing activities, management believes that the Company’s available liquidity, including cash raised

subsequent to September 30, 2025, will be sufficient to meet its obligations and fund its operations for at least one year from the date

these condensed consolidated financial statements are issued.

Accordingly, management has concluded that these financings alleviate the

substantial doubt about the Company’s ability to continue as a going concern.

Management will continue to monitor the Company’s

liquidity position and market conditions and may seek additional financing as necessary to support operations and future growth initiatives.

· TurnOnGreen, Inc.

(“TurnOnGreen”) – commercial electronics;

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

· askROI, Inc.

and RiskOn International, Inc.

(“ROI”) – AI software platform.

OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

11 unchanged sentences

Exchange Commission (the “SEC”) on April 15, 2026.

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, 2025, are not necessarily indicative of the results to be expected for the full year

ending December 31, 2025.

The condensed consolidated balance sheet as of December 31, 2025 was derived

from the Company’s audited 2025 financial statements contained in the above referenced 2025 Annual Report.

Results of operations

for the three months ended March 31, 2026 are not necessarily indicative of results to be expected for future interim periods or the full

year ending December 31, 2026.

Significant Accounting

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

the 2024 Annual Report.

Crypto Assets

during the three months ended September 30, 2025, the Company began holding Bitcoin for long-term investment purposes as a Bitcoin investment

approach, retaining all Bitcoin mined in its operations, and making strategic open market purchases of Bitcoin.

As a result, Bitcoin crypto

assets are included in non-current assets on the condensed consolidated balance sheet due to the Company’s intent to retain and

hold Bitcoin.

There have been no material changes to the Company’s significant

accounting policies disclosed in the 2025 Annual Report.

Reclassifications

3 unchanged sentences

any new accounting pronouncements to determine their applicability.

When it is determined that a new accounting pronouncement may affect

the Company’s financial reporting, the Company undertakes an analysis to determine whether any required changes should be made to

its condensed consolidated financial statements.

On December 14, 2023, the

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

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

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 annual periods beginning January 1, 2027 and for interim periods beginning January 1, 2028, with early adoption permitted.

When management determines that a new accounting pronouncement may

affect the Company’s financial reporting, the Company undertakes an analysis to determine whether any required changes should be

made to its condensed consolidated financial statements.

Recently Issued Standards

In November 2024, the Financial

Accounting Standards Board (“FASB”) issued Accounting Standards Update (“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.

The new standard is

effective for the Company for its annual periods beginning January 1, 2027 and for interim periods beginning January 1, 2028, with early

adoption permitted.

The Company is currently evaluating the impact of adopting the standard.

DECONSOLIDATION OF SUBSIDIARIES AND GRESHAM WORLDWIDE, INC.

DISCONTINUED OPERATIONS

Deconsolidation of Avalanche International

March 28, 2025, AVLP, formerly a majority-owned subsidiary of the Company, filed a voluntary petition for liquidation under Chapter 7

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.

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 nine months ended September 30, 2025.

The Company evaluated the criteria for discontinued operations and determined

that the operations of AVLP did not meet the requirements for such classification.

Deconsolidation of Eco Pack Technologies

Limited (“Eco Pack”)

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

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

Accordingly, the Company deconsolidated

Eco Pack effective as of the filing date.

In connection with the deconsolidation, the Company recognized a loss of $ 0.4 million, which

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

The Company 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 ROI

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

for a subsidiary of ROI.

The Company deconsolidated the subsidiary as it determined that it no longer maintained a controlling financial

interest in the subsidiary of ROI.

The gain recognized reflects the derecognition of the subsidiary’s remaining assets, liabilities,

and equity balances.

The Company evaluated the criteria for discontinued operations and determined that the operations of the subsidiary

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.

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

operations as this was a strategic shift that had and will continue to 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 results of GIGA operations:

Schedule of operations

For the Three

September 30, 2024

Revenue, products

Cost of revenue, products

Operating expenses

Research and development

Selling and marketing

General and administrative

Total operating expenses

Loss from operations

( 1,261,000 )

( 4,293,000 )

Other income (expense):

Interest and other income

Interest expense

( 1,662,000 )

Total other expense, net

Loss before income taxes

( 4,361,000 )

Income tax benefit

( 4,346,000 )

Net loss attributable to non-controlling interest

Net income (loss) available to common stockholders

$ ( 2,792,000 )

The cash flow activity related

to discontinued operations is presented separately on the statement of cash flows as summarized below:

Schedule of statement of cash flows

For the Nine Months

Ended September 30,

Cash flows from operating activities:

$ ( 4,346,000 )

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

Depreciation and amortization

Amortization of right-of-use assets

Amortization of intangibles

Gain on extinguishment of debt

Changes in operating assets and liabilities:

Accounts receivable

( 1,638,000 )

Prepaid expenses and other current assets

( 1,516,000 )

Lease liabilities

Accounts payable and accrued expenses

Net cash used in operating activities

( 6,366,000 )

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

Net cash provided by financing activities

Cash contributions from parent

Effect of exchange rate changes on cash and cash equivalents

Net decrease in cash and cash equivalents and restricted cash

( 4,301,000 )

Cash and cash equivalents and restricted cash at beginning of period

Cash and cash equivalents and restricted cash at end of period

Supplemental disclosures of cash flow information:

Cash paid during the period for interest

In July 2025, the FASB issued ASU 2025-05, Financial Instruments—Credit

Losses (Topic 326):

Measurement of Credit Losses for Accounts Receivable and Contract Assets (“ASU 2025-05”).

provides a practical expedient to assume current economic conditions will not change for the remaining life of an asset when preparing

forecasts as part of estimating credit losses.

The new standard is effective for the Company for its annual periods beginning January

1, 2026 and interim period within those annual periods, with early adoption permitted and should be applied on a prospective basis.

Company adopted ASC 2025-05 during the three months ended March 31, 2026, which did not have a material impact on its consolidated financial

position, results of operations, or cash flows.

In January 2025, the FASB

issued ASU 2025-01, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40) (“ASU 2025-01”), to clarify the effective date of ASU 2024-03.

The new standard is effective for the Company for its annual periods beginning January 1,

2027 and for interim periods beginning January 1, 2028, with early adoption permitted.

The Company is currently evaluating the impact

of adopting ASU 2025-01;

however, because the standard primarily affects disclosure requirements, the Company does not expect adoption

to have a material impact on its consolidated financial position, results of operations, or cash flows.

BUSINESS COMBINATION – GRESHAM

A s disclosed in the 2025

Annual Report , the Company completed the acquisition and reconsolidation of Gresham on November

The preliminary allocation of purchase consideration to the acquired assets and assumed liabilities remains subject to finalization

of certain valuation analyses, including inventory, property and equipment, intangible assets, income taxes, and other working capital

the three months ended March 31, 2026, the Company recorded no material measurement period adjustments related to the acquisition.

Company does not currently expect material changes to the preliminary allocation;

however, final amounts may differ from the preliminary

REVENUE DISAGGREGATION

The following tables summarize

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

The following tables summarize disaggregated customer contract revenues

and the source of the revenue for the three months ended March 31, 2026 and 2025.

Revenues from lending and trading activities included

in consolidated revenues were primarily interest, dividend and other investment income, which are not considered to be revenues from contracts

with customers under GAAP.

Revenue is presented by reportable segment.

The “Holding Co.” column includes revenue that is not allocated to a specific reportable segment but is generated within the

holding company entity.

While not a separate reportable segment, Holding Co.

is included in the table below to reconcile the segments

to total consolidated revenue.

The “Holding Co.” column includes revenue generated

at the parent company level that is not allocated to a specific reportable segment.

Although Holding Co.

is not a separate reportable

segment, it is presented below to reconcile segment revenues to total consolidated revenue.

The Company’s disaggregated

revenues consisted of the following for the three months ended September 30, 2025:

revenues consisted of the following for the three months ended March 31, 2026:

Schedule of disaggregated revenues

1 unchanged sentence

North America

Revenue from 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

Hotel and real estate operations

Revenue from 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

The Company’s disaggregated

revenues consisted of the following for the nine months ended September 30, 2025:

Primary Geographical Markets

North America

Middle East and other

3 unchanged sentences

Major Goods or Services

Power supply units and systems

Revenue from mined crypto assets at Sentinum owned and operated facilities

Revenue from mined crypto assets at Sentinum

owned and operated facilities

Hotel and real estate operations

Revenue from 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

The Company’s disaggregated

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

Primary Geographical Markets

North America

Middle East and other

Revenue from contracts with customers

Revenue, lending and trading activities (North America)

Total revenue

Major Goods or Services

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

Defense systems

Revenue from contracts with customers

6 unchanged sentences

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, 2025:

Primary Geographical Markets

6 unchanged sentences

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

from mined crypto assets at Sentinum

owned and operated facilities

Hotel and real estate operations

8 unchanged sentences

following table sets forth the Company’s financial instruments that were measured at fair value on a recurring basis by level within

the fair value hierarchy at September 30, 2025 (no material financial instruments were measured at fair value on a recurring basis at

December 31, 2024):

the fair value hierarchy at March 31, 2026 and December 31, 2025:

Fair value, assets measured on recurring basis

Fair Value Measurement at September 30, 2025

Fair Value Measurement at March 31, 2026

Investments in other equity securities - embedded conversion feature

Investments in other equity securities - warrants

Embedded conversion feature liabilities

The Company assesses the inputs

used to measure fair value using the three-tier hierarchy based on the extent to which inputs used in measuring fair value are observable

in the market.

For investments where little or no public market exists, management’s determination of fair value is based on the

best available information which may incorporate management’s own assumptions and involves a significant degree of judgment, taking

into consideration various factors including earnings history, financial condition, recent sales prices of the issuer’s securities

and liquidity risks.

Fair Value Measurement at December 31, 2025

Embedded conversion feature liabilities

The Company assesses the inputs used to measure fair value using the

three-tier hierarchy based on the extent to which inputs used in measuring fair value are observable in the market.

For investments where

little or no public market exists, management’s determination of fair value is based on the best available information, which may

incorporate management’s own assumptions and involves a significant degree of judgment, taking into consideration various factors

including earnings history, financial condition, recent sales prices of the Company’s securities and liquidity risks.

no transfers into or out of Level 3 during the three months ended March 31, 2026 or during the year ended December 31, 2025.

The changes in Level 3 fair

value hierarchy during the three and nine months ended September 30, 2025 and 2024 were as follows:

value hierarchy during the three months ended March 31, 2026 and 2025 were as follows:

Schedule of changes in fair value hierarchy

Level 3 Balance at

Level 3 Balance

at End of Period

Nine months ended September 30, 2025

Embedded conversion feature liabilities

$ ( 133,000 )

$ ( 3,098,000 )

at End of Period

Nine months ended September 30, 2024

Warrant liabilities

$ ( 669,000 )

Embedded conversion feature liabilities

$ ( 910,000 )

at Beginning of

Level 3 Balance

at End of Period

Three months ended September 30, 2025

Three months ended March 31, 2026

Investments in other equity securities - embedded conversion feature

Investments in other equity securities - warrants

Embedded conversion feature liabilities

$ ( 1,324,000 )

$ ( 1,824,000 )

Level 3 Balance

at Beginning of

Level 3 Balance

at End of Period

Three months ended September 30, 2024

Warrant liabilities

$ ( 570,000 )

Three months ended March 31, 2025

Embedded conversion feature liabilities

$ ( 155,000 )

CRYPTO ASSETS

The Company measures its crypto

assets at fair value using quoted market prices in active markets for identical assets, which are classified within Level 1 of the fair

value hierarchy.

The following table presents

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

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

Revenue, crypto assets mining

the Company’s significant digital asset holdings as of March 31, 2026 and December 31, 2025:

Schedule of digital asset holdings

Crypto assets

Crypto assets, restricted (1)

Total crypto assets holdings

The Company’s crypto assets, restricted includes Bitcoin pledged as collateral for the convertible promissory notes issued to JGB entities.

The following table presents

the activities of the crypto assets for the nine months ended September 30, 2025 and 2024:

the activities of the crypto assets for the three months ended March 31, 2026 and 2025:

Schedule of activities of the crypto assets

For the Nine Months Ended

September 30,

For the Three Months Ended March 31,

Balance at January 1

3 unchanged sentences

( 5,227,000 )

Transferred to crypto assets, restricted

Unrealized loss on crypto assets

( 7,405,000 )

Balance at September 30

Balance at March 31

The following table presents

the activities of the crypto assets, restricted for the three months ended March 31, 2026:

Schedule of activities of the crypto assets, restricted

Balance at January 1

Transferred to crypto assets, restricted

Unrealized loss on crypto assets, restricted

( 4,682,000 )

Balance at March 31

PROPERTY AND EQUIPMENT, NET

At September 30, 2025 and

December 31, 2024, property and equipment consisted of:

At March 31, 2026 and December

31, 2025, property and equipment consisted of:

Schedule of property and equipment

September 30, 2025

March 31, 2026

December 31, 2025

12 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

INTANGIBLE ASSETS, NET

At September 30, 2025 and December 31,

At March 31, 2026 and December 31,

2025, intangible assets consisted of:

Schedule of intangible asset

September 30, 2025

March 31, 2026

December 31, 2025

Definite lived intangible assets:

Customer list

Developed technology

Customer list

10 - 15 years

Accumulated amortization

( 1,266,000 )

Total definite-lived intangible assets

5 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, 2025, intangible assets subject to amortization have an average remaining useful life of 6.6 years.

The following

table presents estimated amortization expense for each of the succeeding five calendar years and thereafter.

of March 31, 2026, intangible

assets subject to amortization have an average remaining useful life of 6.6 years.

The following table

presents estimated amortization expense for each of the succeeding five calendar years and thereafter.

Schedule of estimated amortization expense

2026 (remainder)

INVESTMENTS – RELATED PARTIES

Investments in Alzamend Neuro,

(“Alzamend”), Ault & Company, Inc.

(“Ault & Company”) and GIGA at September 30, 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 and accrued interest receivable, Ault & Company

December 31, 2024

Promissory notes and accrued interest receivable, GIGA

In bankruptcy

Allowance for credit losses

Total investment in promissory notes and other, related parties

Exit Financing Convertible Note

On September 26, 2025, the Company, through 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

The 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 or $1.00.

Summary of interest income,

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

Schedule of Interest income, related party

For the Three Months Ended

For the Nine Months Ended

September 30,

Interest income, related party

At each reporting date, the

Company applies its judgment to evaluate the collectability of the note receivable and makes a provision based on the assessed amount

of expected credit loss.

This judgment is based on parameters such as interest rates, market conditions and creditworthiness of the creditor.

The Company determined that

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

Investment in Alzamend Series B Convertible

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

Schedule of investment in common stock

Investments in Common Stock, Related Parties at September 30, 2025

Gross Unrealized Losses

Common shares

$ ( 24,310,000 )

Alzamend series B convertible preferred stock, warrants

$ ( 24,310,000 )

Investments in Common Stock, Related Parties at December 31, 2024

Gross Unrealized Losses

Common shares

$ ( 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 months ended September 30, 2025 and 2024:

Schedule of investment in warrants and common stock

For the Three Months Ended September 30,

Balance at July 1

Conversion of Alzamend series B convertible preferred stock to common stock

Sale of Alzamend common stock

( 1,268,000 )

Realized gain in common stock of Alzamend

Unrealized loss in common stock of Alzamend

Balance at September 30

The following tables summarize

the changes in the Company’s investments in Alzamend common stock during the nine months ended September 30, 2025 and 2024:

For the Nine Months Ended September 30,

Balance at January 1

Investment in common stock of Alzamend

Conversion of Alzamend series B convertible preferred stock to common stock

Sale of Alzamend common stock

( 1,274,000 )

Realized loss in common stock of Alzamend

Unrealized gain (loss) in common stock of Alzamend

Balance at September 30

Ault Lending, LLC (“Ault Lending”)

Investment in Alzamend Series B Convertible Preferred Stock and Warrants

Schedule of investment in warrants and preferred stock

September 30,

Investment in Alzamend preferred stock

Total investment in other investments securities, related party

In connection with a securities

purchase agreement entered into with Alzamend in January 2024, Ault Lending purchased 2,100 shares of Alzamend Series B convertible preferred

stock and warrants to purchase 0.2 million shares of Alzamend common stock with a five-year term and an exercise price of $12.00 per share

for a total purchase price of $2.1 million.

During the nine months ended

September 30, 2025, Ault Lending converted a portion of its Alzamend Series B convertible preferred stock into Alzamend common stock,

which resulted in the reduction of the carrying amount of the investment from $ 2.1 million at December 31, 2024 to $ 0.8 million at

September 30, 2025.

The Company has elected to

account for investment in other investments securities, related party, using a measurement alternative under which they are measured at

cost and adjusted for observable price changes and impairments.

Horne and Nisser are

each paid $ 50,000 annually by Alzamend.

Ault is paid $ 25,000 annually by Alzamend.

ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Other current liabilities at September

Other current liabilities at March

31, 2026 and December 31, 2025 consisted of:

Schedule of other current liabilities

September 30,

Accounts payable

Accrued participation profits payable to investors

Accrued payroll and payroll taxes

2 unchanged sentences

Other accrued expenses

DIVIDEND PAYABLE IN TURNONGREEN COMMON

In March 2024, the Company,

in connection with a planned distribution of its common stock holdings of TurnOnGreen, announced the distribution to its stockholders

of 25.0 million shares of TurnOnGreen common stock and warrants to purchase 25.0 million shares of TurnOnGreen common stock, which

resulted in an adjustment to additional paid in capital and increase to non-controlling interest of $ 4.9 million based on the recorded

value of the Company’s holdings in TurnOnGreen at the record date of the distribution.

Transfers of White River Common Stock

In January 2024, ROI announced

that it had concluded that, for regulatory reasons, ROI would be unable to effect the distribution of its shares of common stock of White

River as contemplated by a registration statement previously filed by White River.

During the 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.

In conjunction with the transfers

to non-controlling interests, ROI converted a portion of its White River Series A convertible preferred stock into common stock and recorded

a non-cash $ 17.9 million gain on conversion.

NOTES PAYABLE

Notes payable at September

Notes payable at March 31,

2026 and December 31, 2025, were comprised of the following:

Schedule of notes payable

September 30,

AGREE secured construction loans, in default

March 31, 2026

January 1, 2027

Circle 8 revolving credit facility

Circle 8 cranes with a book

value of $26.2 million

December 16, 2025

Circle 8 cranes with a book value of $27.1 million

June 16, 2026

Circle 8 equipment financing notes

Circle 8 equipment with

a book value of $3.4 million

17, 2025 through July

15% term notes, in default

October 31, 2024

ROI promissory note, in default

Other ($1.2 million in default)

Circle 8 equipment with a book value of $3.0 million

Various dates through March 5, 2031

Ault & Company, Inc.

(“Ault & Company”) and Milton C.

April 27, 2026

Total notes payable

7 unchanged sentences

amortized to interest expense over the life of the notes.

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.

Gain on Extinguishment of ROI Note Payable

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

of an ROI note payable.

Second Amendment to AGREE Construction Loans

In January 2026, the

Company’s subsidiary AGREE amended the terms of its construction loans related to the AGREE properties.

The amendment extended

the maturity dates of the loans to January 1, 2027, subject to a potential one-year extension to January 1, 2028 upon satisfaction

of certain conditions.

The agreement also modifies the interest rate to Term

SOFR plus 5.75% , with required monthly interest payments based on Term SOFR plus 4.75%, with the difference accruing and

payable at maturity or earlier repayment.

On April 1, 2026, the borrowers were required to make a principal payment of $ 3.0

million followed by monthly principal payments of $1.0 million through maturity.

As of the date of this filing, AGREE and its subsidiaries have

not made the required principal payments.

While such non-payment constitutes an event of default under the loan agreements, the

lenders have not provided a notice of default.

The modification also requires the borrowers to fund interest reserves totaling

approximately $ 2.0

million and provides temporary waivers of certain financial covenants through the scheduled maturity date.

The interest reserves

have not been funded as of the date of this filing.

In connection with the modification, the borrowers paid an extension fee of

approximately $ 0.3

Circle 8 Financing

In March 2026, Circle 8 entered

into a secured promissory note in the principal amount of $ 1.5 million for the purchase of a crane.

The secured promissory note accrues

interest at 5.9 % per annum and will mature in March 2031.

In January and February 2026,

the Company issued two short-term term notes to an institutional investor for aggregate gross proceeds of $ 10.0 million.

The notes were

originally scheduled to mature in March and April 2026, respectively, and require periodic principal repayments prior to maturity.

Company amended the note that was scheduled to mature in March 2026 to extend its maturity date to April 7, 2026.

In connection with

the extension, the Company agreed to pay an extension fee of approximately $ 0.1 million, which was added to the outstanding principal

The notes have been repaid in full.

Notes Payable Maturities

Principal maturities of the

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

September 30, 2025 were:

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

of March 31, 2026 were:

Schedule of maturities

3 unchanged sentences

For the Three Months Ended

For the Nine Months Ended

September 30,

Contractual interest expense

4 unchanged sentences

Notes payable, related party

at September 30, 2025 and December 31, 2024, were comprised of the following:

Schedule of interest expense, related party

at March 31, 2026 and December 31, 2025, were comprised of the following:

Schedule of notes payable, related party

Interest rate

September 30, 2025

Effective rate

March 31, 2026

December 31, 2025

1 unchanged sentence

Notes from officers - TurnOnGreen, in default

Other related party advances

Total notes payable

1 unchanged sentence

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

Ault & Company

On September 9, 2025, the

Company executed a Demand Promissory Note (the “Note”) in favor of Ault & Company to formalize prior advances and loans

previously provided by Ault & Company.

The Note has an original principal balance of $ 4.0 million, bears interest at 9.5 % per annum,

and is payable upon demand.

The Note is unsecured.

CONVERTIBLE NOTES

Convertible notes payable at September 30, 2025

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

Convertible notes payable at March 31, 2026 and

December 31, 2025, were comprised of the following:

Schedule of convertible notes payable

Conversion price per

September 30,

SJC Lending, LLC (“SJC”) convertible promissory note

Conversion price

March 31, 2026

Convertible promissory notes issued to JGB entities

85% of 3-day VWAP

December 30, 2027

SJC Lending, LLC (“SJC”) convertible promissory note

75% of 5-day VWAP

June 30, 2026

ROI senior secured convertible note, in default

1 unchanged sentence

April 27, 2024

10% OID convertible promissory note

Forbearance convertible promissory note, in default

June 30, 2025

Convertible promissory note – OID only, in default

90% of 5-day VWAP

September 28, 2024

AVLP convertible promissory notes, principal

$ 0.35 (AVLP stock)

August 22, 2025

TurnOnGreen convertible promissory note

80% of 10-day

(TurnOnGreen stock)

Various dates through March 27, 2027

Fair value of embedded conversion options

Total convertible notes payable

unamortized debt discounts

( 4,387,000 )

( 4,958,000 )

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

3 unchanged sentences

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

(1) Includes forbearance and extension fees and OID costs that are amortized to interest expense over the

life of the notes.

Convertible Promissory Notes

February 5, 2025, the Company entered into an exchange agreement with an institutional investor (“Orchid”), 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 % per annum.

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 matured 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.

April 1, 2025, the Company issued a convertible promissory note to an institutional investor in the principal amount of $ 1.65 million

in consideration for $1.5 million in cash previously advanced to the Company.

The note bears interest at 15% per annum, increasing to

18 % per annum upon an event of default, as defined in the note.

The note matures on September 30, 2025 .

The note is convertible into shares

of the Company’s Class A common stock at any time at a conversion price equal to the greater of (i) the Floor Price and (ii) the

lesser of (A) 75% of the VWAP (as defined in the note) of the Class A common stock during the five trading days immediately prior to the

April 1, 2025 issuance date, or (B) 75% of the VWAP during the five trading days immediately prior to the date of conversion.

The conversion

price is not subject to adjustment for stock splits, combinations, or dividends.

The note was issued with an OID of 10%.

the three months ended September 30, 2025, the outstanding principal and accrued interest under the Orchid convertible promissory notes

were fully converted into shares of the Company’s Class A common stock, and no balance remained outstanding as of September 30,

Convertible Promissory Note

February 2025, the Company and an institutional 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 million.

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

with a maturity date of May 15, 2025 .

On June 3, 2025, the Company and the investor entered into an amendment to the A&R Forbearance

Note, pursuant to which the maturity date of the A&R Forbearance Note was extended until June 30, 2025.

the nine months ended September 30, 2025, the outstanding principal and accrued interest under the A&R Forbearance Note were fully

converted into shares of the Company’s Class A common stock, and no balance remained outstanding as of September 30, 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.

OID Convertible Promissory Notes

April 15, 2025, the Company issued convertible promissory notes in aggregate principal amount of $5.0 million to Target Capital 14 LLC

and Secure Net Capital LLC in exchange for $ 4.0 million in cash proceeds.

The Company incurred placement agent fees and expenses of approximately

$0.5 million in connection with the transaction.

The notes do not bear interest unless an event of default occurs, in which case the interest

rate increases to 20 % per annum.

notes were convertible into Class A common stock at any time at a conversion price equal to the greater of (i) the Floor Price 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.

The conversion price is not subject to adjustment for stock dividends, splits, or similar corporate actions.

The notes were issued with

an OID of 20%.

the nine months ended September 30, 2025, approximately $ 3.4 million of the outstanding balance under the notes was converted into shares

of the Company’s Class A common stock, and the remaining $1.6 million was repaid in cash.

As a result, no balance remained outstanding

under the notes as of September 30, 2025.

Company identified embedded derivative features within certain convertible promissory notes issued during the nine months ended September

30, 2025, that required bifurcation and separate accounting as derivative liabilities under Accounting Standards Codification (“ASC”)

815, Derivatives and Hedging Activities .

Specifically, the embedded conversion options associated with the Orchid convertible promissory

notes, the SJC convertible promissory note and the April 2025 convertible notes 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).

(1) Includes forbearance and extension fees and OID costs that are

amortized to interest expense over the life of the notes.

Convertible Promissory Note Amendment

January 2026, the Company entered into an amendment with SJC pursuant to which the maturity date of the convertible promissory note was

extended to June 30, 2026.

Company identified embedded derivative features within certain convertible promissory notes that required bifurcation and separate accounting

as derivative liabilities under Accounting Standards Codification (“ASC”) 815, Derivatives and Hedging.

These features primarily

relate to conversion options with variable pricing mechanisms.

The fair value of the embedded derivative liabilities

was estimated using a Monte Carlo simulation model.

The model incorporates key assumptions including the Company’s stock price,

risk-free interest rate, expected volatility, credit-risk adjusted discount rate, and the specific terms of each conversion feature (including

floor price, cap, and pricing based on the Volume-Weighted Average Price, or VWAP).

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:

See Note 5 for additional information, including

the initial recognition and rollforward of embedded derivative liabilities.

following table summarizes the key inputs used in the valuation of the embedded derivatives at inception and as of March 31, 2026:

Schedule of valuation of the embedded derivatives

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Weighted Average at

September 30, 2025

March 31, 2026

Valuation technique

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its impact on the overall fair value of the embedded option.

of Convertible Notes

the nine months ended September 30, 2025, principal, accrued and unpaid interest of $ 19.3 million was converted into 10.0 million

shares of Class A common stock of the Company.

Gain (Loss) on Extinguishment of Convertible

the nine months ended September 30, 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;

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

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.

the 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.

the 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.

the three months ended March 31, 2026, the Company did not recognize any gains or losses on extinguishment of convertible notes.

the three months ended March 31, 2025, the Company recognized a net loss on extinguishment of convertible notes of $ 4.6 million, consisting

primarily of losses recognized on certain exchange or refinancing transactions where newly issued instruments were determined to be substantially

different from the original debt instruments under applicable accounting guidance.

Contractual Maturities

Principal maturities of the

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

option, as of March 31, 2026, were:

Schedule of contractual maturities

2026 (remainder)

COMMITMENTS AND CONTINGENCIES

Related Party Commitments

During the three months ended

June 30, 2025, the Company’s subsidiaries, BitNile.com, Inc.

and askROI, Inc., entered into marketing and promotional commitments

with a subsidiary of Ault & Company.

The commitments, which total approximately $9.2 million, relate to the coordination and

execution of media placements, promotional events, and related marketing services in connection with various contracted events.

services are billed on a pass-through basis, at cost, without any mark-up or commission.

Of the total commitments, approximately $ 8.8

million was expensed during the nine months ended September 30, 2025.

Contingencies

Litigation Matters

The Company is involved in

litigation arising from other matters in the ordinary course of business.

The Company is regularly subject to claims, suits, regulatory

and government investigations, and other proceedings involving labor and employment, commercial disputes, and other matters.

suits, regulatory and government investigations, and other proceedings could result in fines, civil penalties, or other adverse consequences.

The Company is involved in litigation arising from matters in the ordinary

course of business.

The Company is regularly subject to claims, suits, regulatory and government investigations, and other proceedings

involving labor and employment, commercial disputes, and other matters.

Such claims, suits, regulatory and government investigations,

and other proceedings could result in fines, civil penalties or other adverse consequences.

Certain of these outstanding

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

Arena Investors, LP (ROI Litigation)

On May 30, 2024, Arena Investors

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

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

Ault Alliance, Inc.

and RiskOn International, Inc.

The Complaint asserts a cause

of action for breach of contract against the Company based on a Guaranty, dated April 27, 2023, and entered into, amongst others, the

Company and Arena, and seeks damages in an amount in excess of $ 3,750,000 , plus interest, attorneys’ fees, costs, expenses, and

disbursements.

The Complaint also asserts

a cause of action for breach of contract against ROI based on an alleged breach of that certain Security Agreement, dated April 27, 2023,

and entered into among ROI and Arena.

In connection with this cause of action, Arena seeks, among other things, costs and expenses from

the Company and ROI.

On July 31, 2024, the Company

and ROI filed a motion to dismiss (the “Motion”) seeking to partially dismiss the Complaint, as against the Company, and to

dismiss the Compliant, in its entirety, as against ROI.

On or about January 21, 2025,

the Court entered an Order denying the part of the Motion which sought partial dismissal of the Complaint, as against Company, and granting

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

On February 18, 2025, the

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

On or about July 29, 2025,

the Court entered an Order (the “Consolidation and Dismissal Order”) consolidating this action with that certain action captioned

Arena Investors, LP v.

Ault III and Kristine Ault , Index No.

655857/2024, pending in the Supreme Court of the State of

New York, County of New York (the “Second Filed Action”).

In the Consolidation and Dismissal Order, the Court also dismissed

Arena’s claims in the Second Filed Action, which arise from an alleged failure to pay a redemption premium as set forth in that

certain Event of Default Redemption Notice, dated November 5, 2024, that Arena transmitted to, among others, the Company.

On or about September 11,

2025, Arena filed a notice of appeal in connection with the Consolidation and Dismissal Order.

On or about September 17,

2025, Arena formally commenced such appeal (the “Appeal”).

On or about October 3, 2025,

the Company and Arena executed various settlement documents.

All deadlines in the action

are currently stayed through March 16, 2026, by which date the Company anticipates that a withdrawal of the Appeal and a stipulation of

discontinuance, with prejudice, of the action, will both be filed.

Other Litigation Matters

With respect to the Company’s

other outstanding matters, based on the Company’s current knowledge, the Company believes that the amount or range of reasonably

possible loss will not, either individually or in aggregate, have a material adverse effect on the Company’s business, consolidated

financial position, results of operations, or cash flows.

However, the outcome of such matters is inherently unpredictable and subject

to significant uncertainties.

The Company had accrued loss

contingencies related to litigation matters of $ 1.3 million and $ 2.3 million as of September 30, 2025 and December 31, 2024, respectively.

Based on the Company’s

current knowledge, the Company believes that the amount or range of reasonably possible loss will not, either individually or in aggregate,

have a material adverse effect on the Company’s business, consolidated financial position, results of operations, or cash flows.

However, the outcome of such matters is inherently unpredictable and subject to significant uncertainties.

STOCKHOLDERS’ EQUITY

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if and when declared, and to participate in a distribution of surplus of assets upon liquidation of the Company.

On December 19, 2025, the

Company entered into an at-the-market issuance sales agreement providing for the sale of up to $50.0 million of additional shares of Class

A common stock under its effective shelf registration statement (the “ATM Offering”).

the period between January 1, 2026 through March 31 , 2026, the Company sold an aggregate of 46.6 million shares

of Class A common stock pursuant to the ATM Offering for gross proceeds of $ 10.6 million.

Class B Common Stock

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the holder of the Class B common stock.

Series D Preferred ATM Offering Activity

On February 13, 2026, the

Company entered into an at-the-market issuance sales agreement to sell shares of the Company’s 13.00% Series D Cumulative Redeemable

Perpetual Preferred Stock, par value $ 0.001 per share (the “Series D Preferred”), having an aggregate offering price of up

to $ 35.4 million from time to time, through an “at the market offering” (the “Series Preferred D ATM Offering”).

During the period between January 1, 2026 through March 31, 2026, the Company sold an aggregate of 2,498 shares of Series D Preferred

Stock pursuant to its Series Preferred D ATM offering for net proceeds of $ 53,000 .

Preferred Stock

Preferred stock as of September

Preferred stock as of March

31, 2026 consisted of the following:

Schedule of preferred stock

Stockholders’ equity

Shares Issued and

Outstanding at

September 30, 2025

March 31, 2026

Series A Convertible Preferred Stock

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Series A Convertible Preferred Stock

Series B Convertible Preferred Stock

Series C Convertible Preferred Stock

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Series G Convertible Preferred Stock

Series H Convertible Preferred Stock

The Company is authorized

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

As of September 30, 2025, the rights, preferences, privileges and restrictions

on the remaining authorized 18.2 million shares of preferred stock have not been determined.

As of March 31, 2026, the rights, preferences, privileges and restrictions

on the remaining authorized 18.2 million shares of preferred stock had not been determined.

The Board is authorized to designate a new

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to or imposed upon any series of preferred shares.

Issuance of Class A Common Stock pursuant

to the At-the-Market Offering

On August 29, 2025, the Company

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

to sell shares of the Company’s class A common stock, having an

aggregate offering price of up to $125 million from time to time, through an ATM offering

Between August 29, 2025 and September 30, 2025, the Company received gross proceeds of $ 38.8 million through the sale of 82.7

million shares of the Company’s class A common stock through the ATM offering.

$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;

investor may, at its sole discretion, purchase additional shares of Series B Preferred Stock prior to the scheduled closings.

During the nine months ended

September 30, 2025, the Company issued an aggregate of 23,914 shares of Series B Preferred Stock for gross proceeds of approximately $ 23.9

In addition, approximately 92 shares of Series B Preferred Stock were issued as paid-in-kind (“PIK”) dividends pursuant

to the terms of the Series B Preferred Stock.

In the same period, the investor converted approximately 24,006 shares of Series B Preferred

Stock, including PIK shares, into shares of Class A common stock.

Each share of Series B Preferred

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

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

subject to a maximum of $10.00 per share.

The holders are entitled to cumulative dividends at a 15% annual rate, payable monthly in arrears,

and for the first two years, the Company may elect to pay such dividends in additional shares of Series B Preferred Stock in lieu of cash.

On April 23, 2025, the Company

filed a Certificate of Amendment to the Certificate of Designation of Preferences, Rights and Limitations of the Series B Convertible

Preferred Stock.

This amendment, approved by the Board of Directors on April 22, 2025, revised the definition of “Conversion Price”

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 of $10.00 per share.

of Equity Purchase Agreement

On May 28, 2025, the Company

and Orion Equity Partners, LLC (“Orion”) mutually agreed to terminate the Purchase Agreement originally entered into on June

24, 2024, as subsequently amended (the “Purchase Agreement”).

The Purchase Agreement provided the Company with the right,

subject to certain terms and conditions, to sell up to $25.0 million of its 13.00% Series D Cumulative Redeemable Perpetual Preferred

Stock (the “Series D Preferred Stock”) to Orion over a 36-month period.

Prior to termination, the Company issued an aggregate

of 0.3 million shares of Series D Preferred Stock pursuant to the Purchase Agreement, generating net proceeds of approximately $3.5 million.

No further shares will be issued under the Purchase Agreement following its termination.

of Series G Preferred Stock and Warrants

During the nine months ended

September 30, 2025, the Company sold to Ault & Company an aggregate of 960 shares of Series G Convertible Preferred Stock and warrants

to purchase an aggregate of 0.2 million shares of Class A common stock, for an aggregate purchase price of $ 1.0 million.

Series H Convertible

Preferred Stock Securities Purchase Agreement with Ault & Company

July 31, 2025, the Company entered into a securities purchase agreement (the “July 2025 SPA”) with Ault & Company, pursuant

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

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

The July 2025 SPA provides that the financing

may be conducted through one or more closings.

During the three months ended September 30, 2025, the Company sold to Ault & Company

4,000 shares of Series H Preferred Stock for an aggregate purchase price of $4.0 million.

share of Series H Preferred Stock has a stated value of $1,000.00 and is convertible into shares of class A common stock at a conversion

price equal to the greater of (i) $0.10 per share and (ii) the lesser of (A) $0.79645 or (B) 105% of the volume weighted average price

of the Class A common stock during the five trading days immediately prior to the date of conversion.

The conversion price is subject

to adjustment in the event of an issuance of Class A common stock at a price per share lower than the conversion price then in effect,

as well as upon customary stock splits, stock dividends, combinations or similar events.

The holders of Series H Preferred Stock are entitled

to cumulative cash dividends at an annual rate of 9.5%, or $95.00 per share, based on the stated value per share.

Dividends shall accrue

for 10 years from the date of issuance of such shares of Series H Preferred Stock and are payable monthly in arrears.

For the first two

years, the Company may elect to pay the dividend amount in shares of Class A common stock rather than cash.

The holders of the Series

H Preferred Stock are entitled to vote with the Class A common stock as a single class on an as-converted basis.

of Convertible Notes

the nine months ended September 30, 2025 , the Company issued 10.0 million shares of Class A common

stock upon conversion of convertible promissory notes payable (see Note 16).

2025 Stock Incentive Plan and Option Grants

On July 31, 2025, the Board

of Directors approved grants of 7.25 million non-qualified stock options to purchase shares of Class A common stock for the Company’s

directors and executive officers.

The grants were issued on August 12, 2025, at an exercise price of $ 0.72 per share.

These grants are

made outside of the 2025 Stock Incentive Plan and are subject to stockholder and exchange approval.

On July 31, 2025, the Board

also approved the Company’s 2025 Stock Incentive Plan, which authorizes the issuance of up to 8.0 million shares, and approved grants

of options under the plan covering an aggregate of 6.2 million shares to employees at an exercise price of $ 0.72 per share.

Vesting for all 13.45 million

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

Because the grants are contingent

upon stockholder and exchange approval, the options are not considered granted for accounting purposes as of September 30, 2025.

no stock-based compensation expense has been recognized, and such expense will commence only once the required approvals are obtained

and the grants are deemed effective under U.S.

Distribution of Class B Common Stock

On September 22, 2025, the

Company announced a planned dividend of 20 million shares of its Class B Common Stock to all holders of its Class A Common Stock and its

Class B Common Stock, as well as its Series B Convertible Preferred Stock, Series C Convertible Preferred Stock, Series G Convertible

Preferred Stock and Series H Preferred Stock on an as-converted basis.

The record date for this dividend was October 6, 2025, and the

payment date was October 31, 2025.

The Company calculates its

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

The One Big Beautiful Bill

Act (“OBBB”) was enacted into law on July 4, 2025.

The OBBB introduced significant tax law changes affecting various corporate

tax provisions, including limitations on business interest expense deductions, immediate expensing of domestic research and experimentation

expenditures under Section 174, updates to executive compensation aggregation rules under Section 162(m), modifications to certain tax

credits, and changes to international tax items such as GILTI, FDII, and BEAT.

Management has assessed the

implications for the Company’s tax reporting obligations.

The bill introduces a range of tax and economic policy changes, however

the overall impact on the Company’s tax reporting is minimal and there will be no material impact on the Company’s income

tax obligations.

NET LOSS PER SHARE

Net loss per share is computed

by dividing the net loss to common stockholders by the weighted average number of Class A and Class B common shares outstanding.

The calculation

of the basic and diluted earnings per share is the same for all periods presented as the effect of the potential common stock equivalents

is anti-dilutive due to the Company’s net loss position for all periods presented.

Anti-dilutive securities, which are convertible

into or exercisable for the Company’s Class A common stock, consisted of the following at September 30, 2025 and 2024:

Schedule of anti-dilutive securities

September 30,

by dividing the net loss to common stockholders by the weighted average number of shares of Class A and Class B common stock outstanding.

The calculation of the basic and diluted earnings per share is the same for all periods presented as the effect of the potential common

stock equivalents is anti-dilutive due to the Company’s net loss position for all periods presented.

Anti-dilutive securities,

which are convertible into or exercisable for the Company’s Class A common stock, consisted of the following at March 31, 2026

Schedule of net loss per share

March 31, 2026

March 31, 2025

Convertible preferred stock

Convertible notes

Stock options

SEGMENT AND CUSTOMERS INFORMATION

The Company had the following

reportable segments as of September 30, 2025 and 2024;

reportable segments as of March 31, 2026 and 2025;

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 nine months ended September 30,

the revenues, expenditures and other operating data of the Company and its operating segments for the three months ended March 31, 2026:

Schedule of operating segments

Revenue, crane operations

Revenue, defense solutions

Revenue, crypto assets mining

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Research and development

Total operating expenses

(Loss) income from operations

$ ( 1,629,000 )

$ ( 4,563,000 )

$ ( 16,962,000 )

$ ( 14,689,000 )

( 30,568,000 )

Other income (expense):

Interest and other income

Interest expense

( 14,566,000 )

Loss on extinguishment of debt

( 3,432,000 )

Gain on deconsolidation of subsidiary

Loss on the sale of fixed assets

( 1,291,000 )

Total other expense, net

( 4,894,000 )

Loss before income taxes

$ ( 35,462,000 )

Depreciation and amortization expense

Interest expense

$ ( 5,848,000 )

$ ( 1,555,000 )

$ ( 1,339,000 )

$ ( 5,801,000 )

$ ( 14,566,000 )

Capital expenditures for the nine months ended September 30, 2025

Segment identifiable assets as of September 30, 2025

$ 242,099,000

The following data presents

the revenues, expenditures and other operating data of the Company and its operating segments for the three months ended September 30,

Revenue, crane operations

Revenue, crypto assets mining

Revenue, hotel and real estate operations

Revenue, lending and trading activities

Revenue, other

Total revenue

Cost of revenue

Gross profit (loss)

Operating expenses

General and administrative

Selling and marketing

Research and development

Change in fair value of crypto assets

Total operating expenses

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$ ( 3,281,000 )

Other income (expense):

Interest and other income

Interest expense

$ ( 17,562,000 )

Gain on extinguishment of debt

Gain on deconsolidation of subsidiary

Loss on the sale of fixed assets

Total other income, net

Loss before income taxes

( 25,956,000 )

Depreciation and amortization expense

Interest expense

$ ( 1,874,000 )

$ ( 272,000 )

$ ( 907,000 )

$ ( 3,063,000 )

Capital expenditures for the three months ended September 30, 2025

The following data presents

the revenues, expenditures and other operating data of the Company and its operating segments for the nine months ended September 30,

Revenue, crane operations

Revenue, crypto assets mining

Revenue, hotel and real estate operations

Revenue, lending and trading activities

Revenue, other

Total revenue

Cost of revenue

Gross profit (loss)

( 1,045,000 )

Operating expenses

General and administrative

Selling and marketing

Research and development

Impairment of property and equipment

Total operating expenses

(Loss) income from operations

$ ( 2,781,000 )

$ ( 11,066,000 )

$ ( 8,851,000 )

$ ( 15,892,000 )

$ ( 14,377,000 )

( 47,869,000 )

Other income (expense):

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( 6,546,000 )

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

Gain on extinguishment of debt

Loss from investment in unconsolidated entity

( 1,958,000 )

Impairment of equity securities

( 6,266,000 )

Provision for loan losses, related party

( 3,068,000 )

Gain on the sale of fixed assets

Change in fair value of embedded derivative liabilities

Total other expense, net

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$ ( 1,943,000 )

Capital expenditures for the nine months ended September 30, 2024

Segment identifiable assets as of December 31, 2024

$ ( 6,546,000 )

Capital expenditures for the three months

ended March 31, 2026

Segment identifiable assets as of March 31, 2026

$ 309,452,000

The following data presents

the revenues, expenditures and other operating data of the Company and its operating segments for the three months ended September 30,

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

Revenue, crane operations

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General and administrative

Impairment of property and equipment

Total operating expenses

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$ ( 3,932,000 )

( 6,384,000 )

Other income (expense):

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Loss on extinguishment of debt

Gain on the sale of fixed assets

Total other expense, net

( 4,569,000 )

Gain on deconsolidation of subsidiary

Loss on the sale of fixed assets

Total other expense, net

Loss before income taxes

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$ ( 864,000 )

Capital expenditures for the three months ended September 30, 2024

$ ( 3,839,000 )

Capital expenditures for the year ended March 31, 2025

Segment identifiable assets as of March 31, 2025

$ 218,254,000

CONCENTRATIONS OF CREDIT AND REVENUE RISK

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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

period between October 1, 2025 through November 4, 2025, the Company sold an aggregate of 172.7 million shares of Class

A common stock pursuant to the 2025 ATM Offering for gross proceeds of $ 86.2 million.

of Convertible Notes

Between October

1, 2025 through November 17, 2025, the Company issued approximately 5.8 million shares of its Class A common stock upon the conversion

of approximately $ 2.3 million in aggregate principal and accrued interest under its outstanding convertible notes payable.

B Preferred Stock

Between October

1, 2025 through November 17, 2025, the Company sold an aggregate of 8,500 shares of its Series B Convertible Preferred Stock for gross

proceeds of approximately $ 8.5 million.

In addition, during that same period, an aggregate of $ 5.5 million in stated value of Series B

Convertible Preferred Stock was converted into approximately 13.8 million shares of the Company’s Class A common stock.

of Series H Preferred Stock Purchase Agreement

November 7, 2025, the Company and Ault & Company entered into an amendment to the Series H Convertible

Preferred Stock Purchase Agreement (the “Series H SPA”) to extend its termination date.

Under the amendment, the termination

date will be extended to the later of (i) one year after the Company has a sufficient number of authorized shares of Class A common stock

to satisfy all conversion and share-reserve requirements under the Series H SPA or (ii) December 31, 2027.

A Common Stock ATM Offering Activity

the period between April 1, 2026 through May 15, 2026,

the Company sold an aggregate of 91.1 million shares of Class A common

stock pursuant to the ATM Offering for gross proceeds of $ 14.0 million.

Series D Preferred ATM Offering Activity

During the period between

April 1, 2026 through May 15,

2026, the Company issued an aggregate of 20,245 shares of Series D Preferred Stock pursuant to its Series Preferred D ATM Offering for gross proceeds of $ 0.4 million.

In April 2026, the Company

entered into a short-term term note with an institutional investor for gross proceeds of $ 10.0 million.

The note was issued with

an OID of $ 0.8 million and has a principal face amount of $ 10.8 million.

The note bears interest at 12 % per annum and matures on June

Beginning May 8, 2026, the Company is required to make weekly principal payments of $ 0.7 million through June 26, 2026, with

the remaining outstanding principal balance and accrued interest due at maturity.

The note may be prepaid at any time without penalty.

Repayment obligations under the note are guaranteed by Ault & Company and Milton C.

Ault, III, the Company’s Executive Chairman.

Receipt of Litigation-Related Proceeds

On April 1, 2026, the Company

received cash proceeds of approximately $ 16.6 million in connection with the resolution of litigation involving a former subsidiary.

Company is currently evaluating the appropriate accounting and treatment of these proceeds, including the extent to which amounts may

be retained, distributed, or otherwise allocated.

Circle 8 Financing Agreement

In April 2026, Circle 8 finalized

a financing arrangement and received $ 10.0 million in equipment financing.

In connection with the financing, Circle 8 issued a promissory

note with a five-year term requiring monthly payments of approximately $ 0.2 million.

The note bears interest at a variable rate based

on the five-year U.S.

Treasury rate plus 2%, with an initial rate of approximately 5.7%.

The financing is secured by

first-priority liens on certain cranes and related equipment owned by Circle 8.

Proceeds from the financing were used to fully repay amounts

outstanding under the Circle 8 revolving credit facility and for general operating purposes.

Authorized Shares Increase

On April 16, 2026, the Company

filed a Certificate of Amendment to its Certificate of Incorporation with the Secretary of State of the State of Delaware to increase

the number of authorized shares of its Class A common stock from 500,000,000 shares to 2,500,000,000 shares.

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