What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2026-05-18 compared with 2025-11-17 · 252 added, 644 removed, 96 unchanged (90% of the section changed)

2 unchanged sentences

Form 10-Q (the “Quarterly Report”), the “Company,” “Hyperscale Data,” “we,” “us”

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

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

data center company anchored by Bitcoin.

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

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

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

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

growing digital asset treasury.

Through its other wholly owned

subsidiary, Ault Capital Group, Inc.

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

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

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

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

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

Upon the occurrence of the Divestiture, the Company

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

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

Hyperscale Data operates as an artificial intelligence

(“AI”) data center company anchored by Bitcoin.

Through its wholly owned subsidiary, Sentinum, Inc., the Company owns and

operates a large-scale data center platform that integrates AI compute infrastructure with Bitcoin mining operations under a unified,

parallel compute model.

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

NVIDIA graphic processing unit clusters, while also operating high-efficiency Bitcoin mining systems that contribute to the Bitcoin network

and the Company’s growing digital asset treasury.

Through another of its wholly

owned subsidiaries, Ault Capital Group, Inc.

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

strategic investments spanning commercial lending and trading, an AI software platform, equipment rental services, defense/aerospace,

industrial, automotive, medical and hotel operations.

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

finance through a licensed lending subsidiary.

Hyperscale Data currently expects the divestiture of ACG (the “Divestiture”)

to occur in the second quarter of 2027, though there can be no assurance that the Divestiture will be completed during such quarter.

the occurrence of the Divestiture, the Company would operate as a focused AI data center and Bitcoin infrastructure company.

Recent Events and Developments

On December 19, 2025, we entered

into an At-the-Market Issuance Sales Agreement with Spartan Capital Securities, LLC (“Spartan”), as sales agent to sell shares

of our Class A common stock, having an aggregate offering price of up to $50 million from time to time, through an “at the market

offering” (the “ATM Offering”) as defined in Rule 415 under the Securities Act.

On December 19, 2025, we filed a prospectus

supplement with the SEC relating to the offer and sale of up to $50 million of Class A common stock in the ATM Offering.

On January 16,

2026, we amended the At-the-Market Issuance Sales Agreement and filed a prospectus supplement to indicate that Spartan will serve as the

lead sales agent and to add Wilson-Davis as an additional sales agent.

As of May 15, 2026, we have

sold 137.6 million shares of our Class A common stock under the ATM Offering for gross proceeds of approximately $24.7 million.

On February 13, 2026, we 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 $1.9 million (the “February 2025 Convertible Note”), in exchange for the cancellation of an outstanding

term note we issued to the investor in April 2024.

That note had an outstanding principal amount and accrued but unpaid interest of $1.9

The February 2025 Convertible Note accrued interest at the rate of 15% per annum, unless an event of default (as defined in the

February 2025 Convertible Note) occurs, at which time the February 2025 Convertible Note would accrue interest at 18% per annum.

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.

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

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

it is entitled in consideration for our 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 our 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, we 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.

On March 14, 2025, we 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 us on May 16, 2024, with outstanding

principal and accrued but unpaid interest of $0.7 million, (ii) a term note issued by us 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 us on February 5, 2025, with outstanding

principal and accrued but unpaid interest of $2.0 million.

The note accrues interest at the rate of 15% per annum, unless an event of

default (as defined in the note) occurs, at which time the note would accrue interest at 18% per annum.

The note will mature on June 30,

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.

On March 21, 2025, we 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 $4.9 million (the “Exchange Note”) in exchange for the cancellation of (i) a term note issued

by us on January 14, 2025, with outstanding principal and accrued but unpaid interest of $2.6 million, (ii) a promissory note issued by

us on March 7, 2025, with outstanding principal and accrued but unpaid interest of $0.5 million, (iii) a promissory note issued by us

on March 12, 2025, with outstanding principal and accrued but unpaid interest of $1.5 million, and (iv) a promissory note issued by us

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, unless an event of default (as defined in the Exchange Note) occurs, at which time the note would accrue interest

at 18% per annum.

The Exchange Note will mature on December 31, 2025.

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

conversion price equal to the greater of (i) the Floor Price and (ii) the lesser of 75% of the VWAP (as defined in the 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.

On March 31, 2025, we entered

into a securities purchase agreement with an institutional investor pursuant to which we agreed to sell up to 50,000 shares of Series

B Convertible Preferred Stock (“Series B Preferred Stock”) for a total purchase price of up to $50.0 million.

The securities

purchase agreement provides that the transaction shall be conducted through 49 separate tranche closings, provided, however, that the

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

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

The initial tranche closing, which is expected to close

promptly after the investor has converted out of the Exchange Note, will consist of the sale and issuance to the investor of 2,000 shares

of Series B Preferred Stock for an aggregate of $2.0 million.

Pursuant to the securities purchase agreement, provided certain closing

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

being required to purchase 1,000 shares per month.

Each share of Series B Preferred

Stock has a stated value of $1,000.00 and is convertible into shares of Class A common stock at a at a conversion price equal to the greater

of (i) $0.40 (the “Floor Price”) and (ii) 75% of our lowest VWAP during the five trading days immediately preceding conversion,

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

Notwithstanding the foregoing, in no event

shall the Series B Preferred Stock be convertible at less than the Floor Price.

The holders of Series B Preferred Stock are entitled to

cumulative cash dividends at an annual rate of 15%, or $150.00 per share, based on the stated value per share.

Dividends shall accrue

for as long as any shares of Series B Preferred Stock remain issued and outstanding and are payable monthly in arrears.

For the first

two years, we may elect to pay the dividend amount in additional shares of Series B Preferred Stock rather than cash.

The holders of the

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

2025, we issued to an institutional investor a convertible promissory note in the principal face amount of $1.7 million in consideration

for an advance we received of $1.5 million.

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

The note will mature on September

The note is convertible into shares of Class A common stock at a conversion price equal to the greater of (i) the Floor Price

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

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

On April 8, 2025, we issued

to an accredited investor a convertible promissory note in the principal face amount of $110,000 in consideration for $100,000.

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

accrue interest at 18% per annum.

The note will mature on September 30, 2025.

The note is convertible into shares of Class A common stock

at a conversion price equal to the greater of (i) $0.45 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 date of issuance of the note or (B) 75% of the lowest VWAP of the

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

On April 15, 2025, we issued

to two accredited investors convertible promissory notes in the aggregate principal face amount of $5 million in aggregate gross consideration

of $4 million in cash paid by the investors, prior to placement agent fees and expenses of approximately $460,000.

The notes were issued

with an original issue discount of twenty percent (20%), or $1 million.

The notes do not accrue interest unless an event of default (as

defined in the notes) occurs, at which time the notes would accrue interest at 20% per annum.

The notes will mature on September 30, 2025.

The notes are convertible into shares of Class A common stock at a conversion price equal to the greater of (i) $0.40 and (ii) 80% of

the lowest closing price of the Class A common stock during the five trading days immediately prior to the date of conversion into shares

of Class A common stock.

On May 13, 2025, we entered

into an OID-only term note agreement with an institutional investor with a principal amount of $1.4 million and an OID of $0.1 million.

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

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

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

with our defense affiliate Gresham Worldwide, Inc.

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

11 bankruptcy proceedings.

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

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

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

On June 9, 2025, Sentinum

entered into a Hosting Services Agreement (the “Agreement”) with a data center hosting company (the “Service Provider”).

Under the Agreement, the Service Provider will provide Sentinum with operations and asset management services and access to approximately

20 megawatts of energy capacity and other critical infrastructure to be used for Sentinum’s Bitcoin mining operations.

The Agreement

has an initial term of one year with automatic one-year renewals unless either Sentinum or the Service Provider elects to terminate the

Agreement 90 days prior to the end of the current term.

Sentinum anticipates deploying approximately 6,800 S19j miners (the “Miners”)

at the Service Provider’s data center.

Sentinum will pay the Service

Provider a non-refundable fee of $10 per Miner for the setup, installation and configuration of the Miners (the “Initial Setup Fee”)

as well as an initial deposit of $800,000 (the “Initial Deposit” and together with the Initial Setup Fee, the “Initial

The Initial Fees shall be paid out of Bitcoin rewards and Bitcoin transaction fee awards (the “Earned BTC”)

that would otherwise be due to Customer until such time as 100% of the Initial Fees have been paid.

Thereafter, Sentinum is entitled to

70% of the Earned BTC and the Service Provider is entitled to 30%.

The Agreement provides that, during periods of high demand on the utility

grid, the Service Provider has the option to curtail the electrical load to the facility and redirect the electrical load to the utility

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

On July 31, 2025, we entered

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

(“Ault & Company”),

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

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

The July 2025 SPA provides that the

financing may be conducted through one or more closings.

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

Stock to Ault & Company.

Each share of Series H Preferred

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, we 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.

On August 29, 2025, we entered

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

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

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

Between August 29,

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

through the ATM offering.

On September 26, 2025, Ault Lending entered into a

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

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

The Loan, which is evidenced by the issuance

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

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

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

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

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

by substantially all of GIGA’s assets.

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

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

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

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

On November 7, 2025, we entered

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

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

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

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

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

to the Company.

Presentation of GIGA as Discontinued Operations

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

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

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

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

We recognized

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

In connection with the Chapter

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

shift that will have a significant effect on our operations and financial results.

As a result, we have 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.

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

GIGA’s senior secured lenders pursuant.

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

confirmed GIGA’s bankruptcy plan.

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

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

bankruptcy, on November 28, 2025.

Change in Plan of Sales of AGREE Hotel Properties

On April 30, 2024, we had

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

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

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

For presentation purposes,

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

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

In connection

with this change in plan of sale, we recorded a loss on impairment of property and equipment related to the real estate assets of AGREE

of $8.0 million during the year ended December 31, 2024.

Deconsolidation of Avalanche International

March 28, 2025, AVLP, a majority-owned subsidiary of ours, filed a voluntary petition for liquidation under Chapter 7 of the U.S.

As a result of the filing, AVLP became subject to the control of the bankruptcy court, and we no longer maintained a controlling

financial interest.

Accordingly, we deconsolidated AVLP effective as of the petition date.

In connection with the deconsolidation, we

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

September 30, 2025.

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

requirements for such classification.

Deconsolidation of Eco Pack Technologies Limited

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

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

Accordingly, we deconsolidated Eco Pack effective

as of the filing date.

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

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

We evaluated the criteria for discontinued operations

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

Deconsolidation of a Subsidiary of RiskOn International,

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

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

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

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

into an At-the-Market Issuance Sales Agreement with Wilson Davis, as sales agent to sell shares of our 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”)

as defined in Rule 415 under the Securities Act.

On February 13, 2026, we filed a prospectus supplement with the SEC relating to the offer

and sale of up to $35.4 million of Series D Preferred in the Series D Preferred ATM Offering.

As of May 15, 2026, we have

sold 22,743 shares of our Series D Preferred under the Series D Preferred ATM Offering for gross proceeds of approximately $0.5 million.

In April 2026, we entered

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

The note was issued with an original

issue discount 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 29, 2026.

Beginning May 8, 2026, we are 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, our Executive Chairman.

As a holding company, our

4 unchanged sentences

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

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

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

We anticipate returning value to

stockholders after satisfying our debt obligations and working capital needs.

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

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

We anticipate returning value to stockholders

after satisfying our debt obligations, working capital needs and other senior capital commitments.

From time to time, we engage

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In recent years, we have provided

capital and relevant expertise to fuel the growth of businesses in AI software platform, social gaming platform, equipment rental services,

defense, industrial and hotel operations.

We have provided capital to subsidiaries as well as partner companies in which we have an equity

interest or may be actively involved, influencing development through board representation and management support.

are a Delaware corporation with our corporate office located at 11411 Southern Highlands Pkwy, Suite 190, Las Vegas, NV 89141.

number is 949-444-5464 and our website address is https://hyperscaledata.com/ .

capital and relevant expertise to fuel the growth of businesses in AI software platform, equipment rental services, defense, industrial

and hotel operations.

We have provided capital to subsidiaries as well as partner companies in which we have an equity interest or may

be actively involved, influencing development through board representation and management support.

Hyperscale Data is a Delaware

corporation with its corporate office located at 11411 Southern Highlands Pkwy, Suite 190, Las Vegas, NV 89141.

Our phone number is 949-444-5464

and our website address is https://hyperscaledata.com/.

Results of Operations

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

Results of Operations for the Three Months Ended March 31, 2026

The following table summarizes

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

For the Three Months Ended September 30,

the results of our operations for the three months ended March 31, 2026 and 2025.

For the Three Months Ended March 31,

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

1 unchanged sentence

(21,274,000 )

(24,595,000 )

Other income (expense):

Other (expense) income:

Interest and other income

Interest expense

Change in fair value of crypto assets, restricted

Gain (loss) on extinguishment of debt

Gain on deconsolidation of subsidiary

(Loss) gain on the sale of fixed assets

Total other income (expense), net

Loss before income taxes

(13,331,000 )

(31,803,000 )

Income tax provision

Net loss from continuing operations

(13,582,000 )

(31,855,000 )

Net income from discontinued operations

(13,582,000 )

(29,639,000 )

Net loss attributable to non-controlling interest

Net loss attributable to Hyperscale Data

(13,013,000 )

(25,549,000 )

Preferred dividends

Net loss available to common stockholders

$ (15,256,000 )

$ (26,875,000 )

Comprehensive loss

Net loss available to common stockholders

$ (15,256,000 )

$ (26,875,000 )

Other comprehensive loss

Foreign currency translation adjustment

Other comprehensive loss

Total comprehensive loss

$ (15,256,000 )

$ (27,096,000 )

Revenues by business category

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

For the Three Months Ended September 30,

Revenue, crypto assets mining

Revenue, commercial real estate leases

Revenue, crane operations

Revenue, lending and trading activities

Total revenue

$ (6,733,000 )

Revenues from Sentinum’s

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

$5.3 million for the same period in 2024.

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

Bitcoin operations at Sentinum-owned and operated facilities.

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

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

The increase in self-mining revenue

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

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

Energy revenues from Circle

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

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

amid continued market uncertainty.

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

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

Revenues from AGREE’s

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

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

year-over-year.

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

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

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

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

and $0.6 million in unrealized gains on investment positions.

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

unrealized gains and losses from market price changes.

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

in our periodic earnings.

TurnOnGreen’s revenues

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

period in 2024.

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

Other revenues were relatively

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

Gross Margins

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

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

The decline was primarily driven by unfavorable margins from

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

Excluding the

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

30, 2025 and 2024 would have been 38%.

Research and Development

Research and development expenses

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

ROI’s Bitnile social gaming platform.

Selling and Marketing

Selling and marketing expenses

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

an increase of $2.6 million, or 55%.

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

higher advertising and promotion costs.

General and Administrative

General and administrative

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

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

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

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

Impairment of Property and Equipment

During the three months ended

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

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

Testing performed indicated the estimated

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

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

In addition, we recorded $1.2

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

Other Income (Expense), Net

Other income, net was $0.7

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

September 30, 2024.

Interest and other income

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

Interest expense totaled $3.1

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

Interest expense is lower

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

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

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

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

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

ROI note payable.

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

of equipment at Circle 8.

Income Tax Provision

Our effective tax rate from

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

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

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

The following table summarizes

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

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, crane operations

Cost of revenue, crypto assets mining

Cost of revenue, hotel and real estate operations

Cost of revenue, lending and trading activities

Cost of revenue, other

Total cost of revenue

Operating expenses

General and administrative

Selling and marketing

Research and development

Impairment of property and equipment

Total operating expenses

Loss from operations

(30,568,000 )

(47,869,000 )

Other income (expense):

Interest and other income

Interest expense

(14,566,000 )

(18,825,000 )

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

(Loss) gain on extinguishment of debt

Loss from investment in unconsolidated entity

Impairment of equity securities

Change in fair value of embedded derivative liabilities

Gain on deconsolidation of subsidiary

Provision for loan losses, related party

(Loss) gain on the sale of fixed assets

Loss on the sale of fixed assets

Total other expense, net

1 unchanged sentence

(29,920,000 )

(57,402,000 )

Income tax provision

Net loss from continuing operations

(30,136,000 )

(57,449,000 )

Net loss from discontinued operations

(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

(29,950,000 )

(55,759,000 )

Preferred dividends

Net loss available to common stockholders

Net loss attributable to common stockholders

$ (32,456,000 )

1 unchanged sentence

Comprehensive loss

Net loss available to common stockholders

Net loss attributable to common stockholders

$ (32,456,000 )

$ (6,171,000 )

Other comprehensive income (loss)

Other comprehensive (loss) income

Foreign currency translation adjustment

Other comprehensive income (loss)

Other comprehensive (loss) income

Total comprehensive loss

2 unchanged sentences

Revenues by business category

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

For the Nine Months Ended September 30,

for the three months ended March 31, 2026 and 2025 were as follows:

For the Three Months Ended March 31,

Revenue, crypto assets mining

$ (9,645,000 )

Revenue, commercial real estate leases

Revenue, crane operations

Revenue, lending and trading activities

Total revenue

$ (12,014,000 )

n/m - not meaningful

Revenues from Sentinum’s

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

million for the nine months ended September 30, 2024.

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

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

hosted at third-party facilities.

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

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

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

to the corresponding period in 2024.

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

crypto asset mining operations decreased by $0.1 million to $5.1 million for the three months ended March 31, 2026, compared to $5.2 million

for the same period in 2025.

The decrease in mining revenue was driven by an 18% decrease in the average Bitcoin price and a 27% increase

in the average Bitcoin network difficulty level during the three months ended March 31, 2026, compared to the same period in 2025.

Energy revenues from Circle

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

8’s crane operations declined by $2.8 million, or 20%, for the three months ended March 31, 2026, compared to the same period in

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

2 unchanged sentences

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

Revenues from AGREE’s

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

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

year-over-year.

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

compared to the same period in 2024.

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

in fee-generating transactions during the current period.

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

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

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

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

from our lending and trading activities increased by $11.5 million to $11.5 million for the three months ended March 31, 2026, compared

to ($28,000) for the same period in 2025.

The increase was driven primarily by litigation-related proceeds associated with legacy ownership

interests held by Ault Lending and unrealized gains on investments in other equity securities.

from our trading activities for the three months ended March 31, 2026 also included net gains on equity securities, including unrealized

gains and losses from market price changes.

1 unchanged sentence

our periodic earnings.

from Gresham were $10.2 million for the three months ended March 31, 2026.

No revenues from Gresham were included in the comparable prior-year

period because we did not reconsolidate Gresham until its emergence from Chapter 11 bankruptcy proceedings in late 2025.

Revenues from AGREE’s

hotel operations increased by $0.5 million, or 14%, for the three months ended March 31, 2026, compared to the same period in 2025.

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

year-over-year.

TurnOnGreen’s revenues

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

period in 2024.

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

Other revenues increased by

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

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

increased by $0.1 million, to $1.7 million for the three months ended March 31, 2026, compared to $1.6 million in the corresponding period

The increase was primarily attributable to increased sales to a new electric vehicle charging customer.

Other revenues decreased by

$0.1 million, or 11%, for the three months ended March 31, 2026, compared to the same period in 2025.

The decrease was primarily driven

by reduced corporate aircraft charter revenue from third parties during the period.

Gross Margins

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

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

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

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

Excluding the impact of lending and trading

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

both periods.

Gross margins increased to

34% for the three months ended March 31, 2026, compared to 21% for the three months ended March 31, 2025.

The improvement was primarily

driven by favorable contributions from lending and trading activities, which generated approximately $9.6 million of gross profit, as

well as the inclusion of Gresham revenue following its emergence from bankruptcy.

These improvements were partially offset by unfavorable

margins from crypto asset mining activities and lower margins from crane operations.

Excluding the effects of crypto

asset mining and lending and trading activities, adjusted gross margins decreased to 29% for the three months ended March 31, 2026, compared

to 36% for the three months ended March 31, 2025, primarily reflecting a shift in revenue mix, including the inclusion of Gresham operations

and lower crane operations margins.

Research and Development

Research and development expenses

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

Bitnile social gaming platform.

increased by approximately $4.7 million for the three months ended March 31, 2026, reflecting increased investment in the development

of our AI and blockchain initiatives as these efforts continue to scale.

Selling and Marketing

Selling and marketing expenses

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

an increase of $3.5 million, or 28%.

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

higher advertising and promotion costs.

were $5.6 million for the three months ended March 31, 2026, compared to $2.3 million for the three months ended March 31, 2025, an increase

of $3.3 million, or 140%, reflecting increased investment in brand-building initiatives and expanded marketing campaigns to support our

growth strategy.

General and Administrative

General and administrative

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

30, 2024, a decrease of $3.3 million.

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

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

bonuses at Ault Lending and a reduction in stock-based compensation expense.

Impairment of Property and Equipment

expenses were $18.5 million for the three months ended March 31, 2026, compared to $9.2 million for the same period in 2025, representing

an increase of $9.3 million, or 101%.

The increase was primarily driven by the inclusion of Gresham following its emergence from bankruptcy,

higher corporate-level expenses at the holding company level, and increased professional fees, including consulting and legal costs, as

well as higher travel-related expenses.

Change in Fair Value of Crypto Assets

We recorded a $7.4 million loss related to the change in fair value

of crypto assets for the three months ended March 31, 2026, reflecting a decline in Bitcoin market prices during the period.

We held approximately

$26.3 million of Bitcoin as of March 31, 2026, compared to $46.2 million as of December 31, 2025, and the decrease in market prices resulted

in an overall unfavorable fair value adjustment recognized in earnings.

Other Income (Expense), Net

Other expense, net was $8.6 million for the three months ended March

31, 2026, compared to other income, net of $1.7 million for the three months ended March 31, 2025.

The change was primarily driven by

the absence of the prior year gain on deconsolidation of a subsidiary, as well as higher interest expense and losses on the change in

fair value of crypto assets, restricted, partially offset by gains recognized in the current period.

Interest and other income totaled $0.8 million for the three months

ended March 31, 2026, compared to $0.2 million for the same period in 2025, primarily reflecting higher income from various non-operating

Interest expense increased

to $6.5 million for the three months ended March 31, 2026, compared to $3.8 million for the same period in 2025, primarily due to higher

average outstanding debt balances and financing costs during the period.

We recorded a $4.7 million

loss related to the change in fair value of restricted crypto assets, restricted for the three months ended March 31, 2026, reflecting

a decline in Bitcoin market prices during the period.

We held approximately $16.7 million of crypto assets, restricted as of March 31,

2026, whereas no crypto assets, restricted were held as of December 31, 2025, and the decrease in market prices resulted in an overall

unfavorable fair value adjustment recognized in earnings.

We recorded a $4.7 million

loss related to the change in fair value of crypto assets, restricted for the three months ended March 31, 2026, reflecting a decline

in Bitcoin market prices during the period.

We held approximately $16.7 million of Bitcoin as of March 31, 2026, compared to $0 as of

December 31, 2025, and the decrease in market prices resulted in an overall unfavorable fair value adjustment recognized in earnings.

During the three months ended

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

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

Testing performed indicated the estimated

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

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

On April 30, 2024, we had

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

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

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

value at the date of the determination not to sell.

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

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

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

for the hotel properties and a comparable sales market approach for the vacant land assets.

Other Expense, Net

Other expense, net was $4.9

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

Interest and other income

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

Interest expense totaled $14.6

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

Interest expense is lower

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

For the nine months ended

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

equity securities.

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

at the date of transfer.

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

stock into common stock.

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

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

This amount includes:

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

and restated forbearance agreement with an institutional investor.

As part of this agreement, we issued an amended and restated convertible

promissory note (the “A&R Forbearance Note”) with a principal amount of $3.5 million.

The A&R Forbearance Note was

determined to be substantially different from the original note due to significant modifications, including an increased principal balance

and the addition of a conversion feature.

Accordingly, the original note was derecognized, and extinguishment accounting was applied.

The $2.6 million loss reflects the excess of the value of the A&R Forbearance Note over the net carrying amount of the original note;

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

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

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

Accordingly, a $1.3 million loss on extinguishment was

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

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

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 gain of $0.3 million resulting from the conversion of $0.7 million of convertible notes into 0.2 million

shares of Class A common stock, which had a fair value of $0.4 million at the time of conversion.

During the nine months ended

September 30, 2024, the holder of ROI convertible notes converted $2.3 million of their senior secured convertible notes that had a fair

value of $0.9 million at the time of conversion and recognized a $1.4 million gain on extinguishment of debt.

During the three months

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

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

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

ROI note payable.

Loss from investment in unconsolidated

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

in Algorhythm Holdings, Inc.

On March 28, 2025, AVLP, formerly

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

Bankruptcy Code.

of the filing, AVLP became subject to the control of the bankruptcy court, and we no longer maintained a controlling financial interest.

Accordingly, we deconsolidated AVLP effective as of the petition date.

In connection with the deconsolidation, we recognized a gain of

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

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

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

Accordingly, we deconsolidated Eco Pack

effective as of the filing date.

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

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

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

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

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

Cumulative downward adjustments

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

September 30, 2024.

During the nine months ended

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

surrounding collection.

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

March 31, 2026, we recognized a gain on extinguishment of debt of approximately $0.5 million, compared to a loss of $4.6 million in the

prior year period, reflecting the settlement of certain debt obligations on favorable terms.

Additionally, we recognized

a $1.3 million gain related to the change in fair value of embedded derivative liabilities during the three months ended March 31, 2026,

primarily driven by changes in our stock price and other key valuation inputs, including volatility and discount rates, associated with

certain convertible financing instruments.

For the three months ended

March 31, 2025, we recognized a $10.0 million gain on deconsolidation of a subsidiary (Avalanche International Corp.) following its filing

for Chapter 7 liquidation, which resulted in us no longer maintaining a controlling financial interest.

This gain did not recur in the

current period.

Income Tax Provision

Our effective tax rate from

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

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

We recorded an income tax provision

of approximately $0.2 million for the three months ended March 31, 2026, compared to $0.1 million for the same period in 2025.

The effective

tax rate for the three months ended March 31, 2026 was approximately 0.8%, compared to 1.3% for the same period in 2025.

The effective

tax rate differs from the statutory rate primarily due to the impact of valuation allowances and the mix of income and losses across jurisdictions.

Liquidity and Capital Resources

As of September 30, 2025,

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

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

The increase in cash and cash equivalents was primarily

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

and convertible notes.

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

and equipment.

Net cash used in operating

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

September 30, 2024.

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

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

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

Net cash used in operating activities for the nine months

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

Net cash used in investing

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

million for the nine months ended September 30, 2024.

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

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

receivable, related party;

· $6.1 million capital expenditures;

· $4.2 million purchases of crypto assets;

· $1.5 million investments in loans receivable;

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

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

Net cash used in investing

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

Net cash provided by financing

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

30, 2024, and primarily reflects the following transactions:

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

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

· $5.2 million gross proceeds from convertible notes payable, offset by $3.5 million payments on convertible

notes payable;

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

and Series H preferred stock, related party.

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

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

· $6.3 million payments of preferred dividends.

As of March 31, 2026, we had

$10.5 million in cash and cash equivalents and $25.7 million in restricted cash, compared to $13.1 million in cash and cash equivalents

and $36.1 million in restricted cash as of December 31, 2025.

In the next 12 months, in

addition to funding our operations, we expect to satisfy obligations related to scheduled debt maturities, interest payments, operating

lease obligations, accrued preferred dividend obligations, and planned capital expenditures associated with our data center infrastructure,

mining operations and other operating businesses.

As of March 31, 2026, our short-term obligations primarily consisted of approximately

$94.6 million of current notes payable and convertible notes payable, approximately $2.0 million of current operating lease liabilities,

and approximately $60.6 million of accounts payable and accrued expenses.

To fund our short-term liquidity

requirements, management expects to utilize a combination of existing cash and restricted cash balances, cash generated from operations,

proceeds from financings, capital raising activities, sales of investments or other assets, and other available liquidity sources.

of March 31, 2026, we also held approximately $26.3 million of crypto assets, excluding the $16.7 million of crypto assets, restricted.

Our longer-term liquidity

requirements beyond the next 12 months primarily relate to long-term debt obligations, lease commitments, strategic capital expenditures,

investments in infrastructure expansion and strategic growth initiatives, and other long-term operating commitments.

Management continually

evaluates opportunities to refinance existing indebtedness, extend maturities, raise additional capital, monetize investments or assets,

and pursue other strategic transactions to support our long-term liquidity objectives.

We believe our existing liquidity

sources, anticipated cash generated from operations and access to external financing sources will provide us with the flexibility necessary

to support our operations and address our anticipated obligations over at least the next 12 months.

However, our ability to maintain adequate

liquidity will depend on, among other factors, operating performance, capital market conditions, the availability of additional financing,

and the market value of our assets and investments.

Total cash, cash equivalents and restricted cash decreased by approximately

$12.9 million during the three months ended March 31, 2026, primarily reflecting cash used in investing activities, partially offset by

cash provided by financing activities.

Net cash used in operating activities was

approximately $0.2 million for the three months ended March 31, 2026, compared to $4.0 million for the same period in 2025.

Net cash used in investing activities was

approximately $22.8 million for the three months ended March 31, 2026, compared to $1.2 million for the same period in 2025.

in investing activities during the three months ended March 31, 2026 was primarily attributable to:

· $10.6 million of capital expenditures related to property and equipment;

· $7.7 million of investments in non-marketable equity securities;

· $3.8 million of purchases of crypto assets;

· $2.9 million of investments in loans receivable.

These uses were partially

offset by $1.1 million collections on loans receivable and $1.0 million of proceeds from the sale of property and equipment.

Net cash provided by financing

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

Financing Transactions Subsequent to September

Sales of Series B Convertible Preferred Stock

From October 1, 2025 through

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

Issuance of Class A Common Stock pursuant to

the ATM Offering

From October 1, 2025 through

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

through the ATM offering.

activities was approximately $10.6 million for the three months ended March 31, 2026, compared to $4.7 million for the same period in

Cash provided by financing

activities during the 2026 period primarily consisted of:

· $18.3 million of proceeds from notes payable;

· $10.6 million of gross proceeds from the sale of Class A common stock, net of $0.3 million in offering costs;

· $0.9 million of proceeds from related party notes payable;

· $0.8 million of proceeds from convertible notes.

These inflows were partially

· $14.3 million of payments on notes payable;

· $2.5 million of preferred dividend payments;

· $1.7 million of repayments of related party notes payable;

· $1.4 million of repayments on convertible notes.

Financing Transactions Subsequent to March

A Common Stock ATM Offering Activity

the period between April 1, 2026 through May 15 , 2026, we 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 , we sold an aggregate of 20,245

shares of Series D Preferred Stock pursuant to our Series Preferred D ATM Offering for gross proceeds of $0.4 million.

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 repay amounts

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

In April 2026, we 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 29, 2026.

Beginning May 8, 2026, we are 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, our Executive Chairman.

Critical Accounting Estimates

1 unchanged sentence

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

applicable for a smaller reporting company.

we are a smaller reporting company, we are not required to provide the information otherwise required under this Item.

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 2. Management’s Discussion and Analysis