0000896493 false 2021 Q3 --12-31 true True 0 0 0 0 44,047,000 200,981,000 2,144,000 29,550,000 P10Y P14Y P5Y 31 25 P2Y10M24D P4Y8M12D P5Y P5Y P3Y10M24D P4Y9M18D P9Y10M24D P4Y2M12D P2Y6M P9Y10M24D P8Y11M19D P9Y6M26D P9Y4M28D P9Y7M2D P6Y3M29D P9Y10M24D P3Y6M14D P4Y P2Y8M12D P2Y6M P2Y11M26D P2Y7M17D P1Y5M12D P1Y5M8D P3Y11M23D P1Y4M24D P5Y 1,014,000 4,265,000 P6Y4M24D P5Y 192,326,000 21010000 43646000 144000 0000896493 2021-01-01 2021-09-30 0000896493 2021-11-18 0000896493 2021-09-30 0000896493 2020-12-31 0000896493 us-gaap:SeriesAPreferredStockMember 2021-09-30 0000896493 us-gaap:SeriesAPreferredStockMember 2020-12-31 0000896493 us-gaap:SeriesBPreferredStockMember 2021-09-30 0000896493 us-gaap:SeriesBPreferredStockMember 2020-12-31 0000896493 us-gaap:CommonClassAMember 2021-09-30 0000896493 us-gaap:CommonClassAMember 2020-12-31 0000896493 us-gaap:CommonClassBMember 2021-09-30 0000896493 us-gaap:CommonClassBMember 2020-12-31 0000896493 dpw:RevenueMember 2021-07-01 2021-09-30 0000896493 dpw:RevenueMember 2020-07-01 2020-09-30 0000896493 dpw:RevenueMember 2021-01-01 2021-09-30 0000896493 dpw:RevenueMember 2020-01-01 2020-09-30 0000896493 dpw:RevenueCryptocurrencyMiningMember 2021-07-01 2021-09-30 0000896493 dpw:RevenueCryptocurrencyMiningMember 2020-07-01 2020-09-30 0000896493 dpw:RevenueCryptocurrencyMiningMember 2021-01-01 2021-09-30 0000896493 dpw:RevenueCryptocurrencyMiningMember 2020-01-01 2020-09-30 0000896493 dpw:LendingAndTradingActivitiesMember 2021-07-01 2021-09-30 0000896493 dpw:LendingAndTradingActivitiesMember 2020-07-01 2020-09-30 0000896493 dpw:LendingAndTradingActivitiesMember 2021-01-01 2021-09-30 0000896493 dpw:LendingAndTradingActivitiesMember 2020-01-01 2020-09-30 0000896493 2021-07-01 2021-09-30 0000896493 2020-07-01 2020-09-30 0000896493 2020-01-01 2020-09-30 0000896493 us-gaap:PreferredStockMember 2021-06-30 0000896493 us-gaap:CommonStockMember 2021-06-30 0000896493 us-gaap:AdditionalPaidInCapitalMember 2021-06-30 0000896493 us-gaap:RetainedEarningsMember 2021-06-30 0000896493 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2021-06-30 0000896493 us-gaap:NoncontrollingInterestMember 2021-06-30 0000896493 us-gaap:TreasuryStockMember 2021-06-30 0000896493 2021-06-30 0000896493 us-gaap:PreferredStockMember 2021-07-01 2021-09-30 0000896493 us-gaap:CommonStockMember 2021-07-01 2021-09-30 0000896493 us-gaap:AdditionalPaidInCapitalMember 2021-07-01 2021-09-30 0000896493 us-gaap:RetainedEarningsMember 2021-07-01 2021-09-30 0000896493 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2021-07-01 2021-09-30 0000896493 us-gaap:NoncontrollingInterestMember 2021-07-01 2021-09-30 0000896493 us-gaap:TreasuryStockMember 2021-07-01 2021-09-30 0000896493 us-gaap:PreferredStockMember 2021-09-30 0000896493 us-gaap:CommonStockMember 2021-09-30 0000896493 us-gaap:AdditionalPaidInCapitalMember 2021-09-30 0000896493 us-gaap:RetainedEarningsMember 2021-09-30 0000896493 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2021-09-30 0000896493 us-gaap:NoncontrollingInterestMember 2021-09-30 0000896493 us-gaap:TreasuryStockMember 2021-09-30 0000896493 us-gaap:PreferredStockMember 2020-06-30 0000896493 us-gaap:CommonStockMember 2020-06-30 0000896493 us-gaap:AdditionalPaidInCapitalMember 2020-06-30 0000896493 us-gaap:RetainedEarningsMember 2020-06-30 0000896493 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-06-30 0000896493 us-gaap:NoncontrollingInterestMember 2020-06-30 0000896493 2020-06-30 0000896493 us-gaap:PreferredStockMember 2020-07-01 2020-09-30 0000896493 us-gaap:CommonStockMember 2020-07-01 2020-09-30 0000896493 us-gaap:AdditionalPaidInCapitalMember 2020-07-01 2020-09-30 0000896493 us-gaap:RetainedEarningsMember 2020-07-01 2020-09-30 0000896493 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-07-01 2020-09-30 0000896493 us-gaap:NoncontrollingInterestMember 2020-07-01 2020-09-30 0000896493 us-gaap:PreferredStockMember 2020-09-30 0000896493 us-gaap:CommonStockMember 2020-09-30 0000896493 us-gaap:AdditionalPaidInCapitalMember 2020-09-30 0000896493 us-gaap:RetainedEarningsMember 2020-09-30 0000896493 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-09-30 0000896493 us-gaap:NoncontrollingInterestMember 2020-09-30 0000896493 2020-09-30 0000896493 us-gaap:PreferredStockMember 2020-12-31 0000896493 us-gaap:CommonStockMember 2020-12-31 0000896493 us-gaap:AdditionalPaidInCapitalMember 2020-12-31 0000896493 us-gaap:RetainedEarningsMember 2020-12-31 0000896493 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-12-31 0000896493 us-gaap:NoncontrollingInterestMember 2020-12-31 0000896493 us-gaap:TreasuryStockMember 2020-12-31 0000896493 us-gaap:PreferredStockMember 2021-01-01 2021-09-30 0000896493 us-gaap:CommonStockMember 2021-01-01 2021-09-30 0000896493 us-gaap:AdditionalPaidInCapitalMember 2021-01-01 2021-09-30 0000896493 us-gaap:RetainedEarningsMember 2021-01-01 2021-09-30 0000896493 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2021-01-01 2021-09-30 0000896493 us-gaap:NoncontrollingInterestMember 2021-01-01 2021-09-30 0000896493 us-gaap:TreasuryStockMember 2021-01-01 2021-09-30 0000896493 us-gaap:PreferredStockMember 2019-12-31 0000896493 us-gaap:CommonStockMember 2019-12-31 0000896493 us-gaap:AdditionalPaidInCapitalMember 2019-12-31 0000896493 us-gaap:RetainedEarningsMember 2019-12-31 0000896493 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-12-31 0000896493 us-gaap:NoncontrollingInterestMember 2019-12-31 0000896493 2019-12-31 0000896493 us-gaap:PreferredStockMember 2020-01-01 2020-09-30 0000896493 us-gaap:CommonStockMember 2020-01-01 2020-09-30 0000896493 us-gaap:AdditionalPaidInCapitalMember 2020-01-01 2020-09-30 0000896493 us-gaap:RetainedEarningsMember 2020-01-01 2020-09-30 0000896493 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-01-01 2020-09-30 0000896493 us-gaap:NoncontrollingInterestMember 2020-01-01 2020-09-30 0000896493 dpw:GWWMember srt:NorthAmericaMember 2021-07-01 2021-09-30 0000896493 dpw:TurnOnGreenMember srt:NorthAmericaMember 2021-07-01 2021-09-30 0000896493 dpw:DPLendingMember srt:NorthAmericaMember 2021-07-01 2021-09-30 0000896493 srt:NorthAmericaMember 2021-07-01 2021-09-30 0000896493 dpw:GWWMember srt:EuropeMember 2021-07-01 2021-09-30 0000896493 dpw:TurnOnGreenMember srt:EuropeMember 2021-07-01 2021-09-30 0000896493 dpw:DPLendingMember srt:EuropeMember 2021-07-01 2021-09-30 0000896493 srt:EuropeMember 2021-07-01 2021-09-30 0000896493 dpw:GWWMember us-gaap:MiddleEastMember 2021-07-01 2021-09-30 0000896493 dpw:TurnOnGreenMember us-gaap:MiddleEastMember 2021-07-01 2021-09-30 0000896493 dpw:DPLendingMember us-gaap:MiddleEastMember 2021-07-01 2021-09-30 0000896493 us-gaap:MiddleEastMember 2021-07-01 2021-09-30 0000896493 dpw:GWWMember dpw:OtherMember 2021-07-01 2021-09-30 0000896493 dpw:TurnOnGreenMember dpw:OtherMember 2021-07-01 2021-09-30 0000896493 dpw:DPLendingMember dpw:OtherMember 2021-07-01 2021-09-30 0000896493 dpw:OtherMember 2021-07-01 2021-09-30 0000896493 dpw:GWWMember 2021-07-01 2021-09-30 0000896493 dpw:TurnOnGreenMember 2021-07-01 2021-09-30 0000896493 dpw:DPLendingMember 2021-07-01 2021-09-30 0000896493 dpw:GWWMember dpw:RFMicrowaveFiltersMember 2021-07-01 2021-09-30 0000896493 dpw:TurnOnGreenMember dpw:RFMicrowaveFiltersMember 2021-07-01 2021-09-30 0000896493 dpw:DPLendingMember dpw:RFMicrowaveFiltersMember 2021-07-01 2021-09-30 0000896493 dpw:RFMicrowaveFiltersMember 2021-07-01 2021-09-30 0000896493 dpw:GWWMember dpw:DetectorlogarithmicvideoamplifiersMember 2021-07-01 2021-09-30 0000896493 dpw:TurnOnGreenMember dpw:DetectorlogarithmicvideoamplifiersMember 2021-07-01 2021-09-30 0000896493 dpw:DPLendingMember dpw:DetectorlogarithmicvideoamplifiersMember 2021-07-01 2021-09-30 0000896493 dpw:DetectorlogarithmicvideoamplifiersMember 2021-07-01 2021-09-30 0000896493 dpw:GWWMember dpw:PowerSupplyUnitsMember 2021-07-01 2021-09-30 0000896493 dpw:TurnOnGreenMember dpw:PowerSupplyUnitsMember 2021-07-01 2021-09-30 0000896493 dpw:DPLendingMember dpw:PowerSupplyUnitsMember 2021-07-01 2021-09-30 0000896493 dpw:PowerSupplyUnitsMember 2021-07-01 2021-09-30 0000896493 dpw:GWWMember dpw:PowerSupplySystemsMember 2021-07-01 2021-09-30 0000896493 dpw:TurnOnGreenMember dpw:PowerSupplySystemsMember 2021-07-01 2021-09-30 0000896493 dpw:DPLendingMember dpw:PowerSupplySystemsMember 2021-07-01 2021-09-30 0000896493 dpw:PowerSupplySystemsMember 2021-07-01 2021-09-30 0000896493 dpw:GWWMember dpw:HealthcareDiagnosticSystemsMember 2021-07-01 2021-09-30 0000896493 dpw:TurnOnGreenMember dpw:HealthcareDiagnosticSystemsMember 2021-07-01 2021-09-30 0000896493 dpw:DPLendingMember dpw:HealthcareDiagnosticSystemsMember 2021-07-01 2021-09-30 0000896493 dpw:HealthcareDiagnosticSystemsMember 2021-07-01 2021-09-30 0000896493 dpw:GWWMember dpw:DefenseSystemsMember 2021-07-01 2021-09-30 0000896493 dpw:TurnOnGreenMember dpw:DefenseSystemsMember 2021-07-01 2021-09-30 0000896493 dpw:DPLendingMember dpw:DefenseSystemsMember 2021-07-01 2021-09-30 0000896493 dpw:DefenseSystemsMember 2021-07-01 2021-09-30 0000896493 dpw:GWWMember dpw:DigitalCurrencyMiningMember 2021-07-01 2021-09-30 0000896493 dpw:TurnOnGreenMember dpw:DigitalCurrencyMiningMember 2021-07-01 2021-09-30 0000896493 dpw:DPLendingMember dpw:DigitalCurrencyMiningMember 2021-07-01 2021-09-30 0000896493 dpw:DigitalCurrencyMiningMember 2021-07-01 2021-09-30 0000896493 dpw:GWWMember dpw:OtherMember 2021-07-01 2021-09-30 0000896493 dpw:TurnOnGreenMember dpw:OtherMember 2021-07-01 2021-09-30 0000896493 dpw:DPLendingMember dpw:OtherMember 2021-07-01 2021-09-30 0000896493 dpw:OtherMember 2021-07-01 2021-09-30 0000896493 dpw:GWWMember dpw:GoodsTransferredAtAPointInTimeMember 2021-07-01 2021-09-30 0000896493 dpw:TurnOnGreenMember dpw:GoodsTransferredAtAPointInTimeMember 2021-07-01 2021-09-30 0000896493 dpw:DPLendingMember dpw:GoodsTransferredAtAPointInTimeMember 2021-07-01 2021-09-30 0000896493 dpw:GoodsTransferredAtAPointInTimeMember 2021-07-01 2021-09-30 0000896493 dpw:GWWMember dpw:ServicesTransferredOverTimeMember 2021-07-01 2021-09-30 0000896493 dpw:ServicesTransferredOverTimeMember 2021-07-01 2021-09-30 0000896493 dpw:GWWMember srt:NorthAmericaMember 2020-07-01 2020-09-30 0000896493 dpw:TurnOnGreenMember srt:NorthAmericaMember 2020-07-01 2020-09-30 0000896493 dpw:DPLendingMember srt:NorthAmericaMember 2020-07-01 2020-09-30 0000896493 srt:NorthAmericaMember 2020-07-01 2020-09-30 0000896493 dpw:GWWMember srt:EuropeMember 2020-07-01 2020-09-30 0000896493 dpw:TurnOnGreenMember srt:EuropeMember 2020-07-01 2020-09-30 0000896493 dpw:DPLendingMember srt:EuropeMember 2020-07-01 2020-09-30 0000896493 srt:EuropeMember 2020-07-01 2020-09-30 0000896493 dpw:GWWMember us-gaap:MiddleEastMember 2020-07-01 2020-09-30 0000896493 dpw:TurnOnGreenMember us-gaap:MiddleEastMember 2020-07-01 2020-09-30 0000896493 dpw:DPLendingMember us-gaap:MiddleEastMember 2020-07-01 2020-09-30 0000896493 us-gaap:MiddleEastMember 2020-07-01 2020-09-30 0000896493 dpw:GWWMember dpw:OtherMember 2020-07-01 2020-09-30 0000896493 dpw:TurnOnGreenMember dpw:OtherMember 2020-07-01 2020-09-30 0000896493 dpw:DPLendingMember dpw:OtherMember 2020-07-01 2020-09-30 0000896493 dpw:OtherMember 2020-07-01 2020-09-30 0000896493 dpw:GWWMember 2020-07-01 2020-09-30 0000896493 dpw:TurnOnGreenMember 2020-07-01 2020-09-30 0000896493 dpw:DPLendingMember 2020-07-01 2020-09-30 0000896493 dpw:GWWMember dpw:RFMicrowaveFiltersMember 2020-07-01 2020-09-30 0000896493 dpw:TurnOnGreenMember dpw:RFMicrowaveFiltersMember 2020-07-01 2020-09-30 0000896493 dpw:DPLendingMember dpw:RFMicrowaveFiltersMember 2020-07-01 2020-09-30 0000896493 dpw:RFMicrowaveFiltersMember 2020-07-01 2020-09-30 0000896493 dpw:GWWMember dpw:DetectorlogarithmicvideoamplifiersMember 2020-07-01 2020-09-30 0000896493 dpw:TurnOnGreenMember dpw:DetectorlogarithmicvideoamplifiersMember 2020-07-01 2020-09-30 0000896493 dpw:DPLendingMember dpw:DetectorlogarithmicvideoamplifiersMember 2020-07-01 2020-09-30 0000896493 dpw:DetectorlogarithmicvideoamplifiersMember 2020-07-01 2020-09-30 0000896493 dpw:GWWMember dpw:PowerSupplyUnitsMember 2020-07-01 2020-09-30 0000896493 dpw:TurnOnGreenMember dpw:PowerSupplyUnitsMember 2020-07-01 2020-09-30 0000896493 dpw:DPLendingMember dpw:PowerSupplyUnitsMember 2020-07-01 2020-09-30 0000896493 dpw:PowerSupplyUnitsMember 2020-07-01 2020-09-30 0000896493 dpw:GWWMember dpw:PowerSupplySystemsMember 2020-07-01 2020-09-30 0000896493 dpw:TurnOnGreenMember dpw:PowerSupplySystemsMember 2020-07-01 2020-09-30 0000896493 dpw:DPLendingMember dpw:PowerSupplySystemsMember 2020-07-01 2020-09-30 0000896493 dpw:PowerSupplySystemsMember 2020-07-01 2020-09-30 0000896493 dpw:GWWMember dpw:HealthcareDiagnosticSystemsMember 2020-07-01 2020-09-30 0000896493 dpw:TurnOnGreenMember dpw:HealthcareDiagnosticSystemsMember 2020-07-01 2020-09-30 0000896493 dpw:DPLendingMember dpw:HealthcareDiagnosticSystemsMember 2020-07-01 2020-09-30 0000896493 dpw:HealthcareDiagnosticSystemsMember 2020-07-01 2020-09-30 0000896493 dpw:GWWMember dpw:DefenseSystemsMember 2020-07-01 2020-09-30 0000896493 dpw:TurnOnGreenMember dpw:DefenseSystemsMember 2020-07-01 2020-09-30 0000896493 dpw:DPLendingMember dpw:DefenseSystemsMember 2020-07-01 2020-09-30 0000896493 dpw:DefenseSystemsMember 2020-07-01 2020-09-30 0000896493 dpw:GWWMember dpw:GoodsTransferredAtAPointInTimeMember 2020-07-01 2020-09-30 0000896493 dpw:TurnOnGreenMember dpw:GoodsTransferredAtAPointInTimeMember 2020-07-01 2020-09-30 0000896493 dpw:DPLendingMember dpw:GoodsTransferredAtAPointInTimeMember 2020-07-01 2020-09-30 0000896493 dpw:GoodsTransferredAtAPointInTimeMember 2020-07-01 2020-09-30 0000896493 dpw:GWWMember dpw:ServicesTransferredOverTimeMember 2020-07-01 2020-09-30 0000896493 dpw:ServicesTransferredOverTimeMember 2020-07-01 2020-09-30 0000896493 dpw:GWWMember srt:NorthAmericaMember 2021-01-01 2021-09-30 0000896493 dpw:TurnOnGreenMember srt:NorthAmericaMember 2021-01-01 2021-09-30 0000896493 dpw:DPLendingMember srt:NorthAmericaMember 2021-01-01 2021-09-30 0000896493 srt:NorthAmericaMember 2021-01-01 2021-09-30 0000896493 dpw:GWWMember srt:EuropeMember 2021-01-01 2021-09-30 0000896493 dpw:TurnOnGreenMember srt:EuropeMember 2021-01-01 2021-09-30 0000896493 dpw:DPLendingMember srt:EuropeMember 2021-01-01 2021-09-30 0000896493 srt:EuropeMember 2021-01-01 2021-09-30 0000896493 dpw:GWWMember us-gaap:MiddleEastMember 2021-01-01 2021-09-30 0000896493 dpw:TurnOnGreenMember us-gaap:MiddleEastMember 2021-01-01 2021-09-30 0000896493 dpw:DPLendingMember us-gaap:MiddleEastMember 2021-01-01 2021-09-30 0000896493 us-gaap:MiddleEastMember 2021-01-01 2021-09-30 0000896493 dpw:GWWMember dpw:OtherMember 2021-01-01 2021-09-30 0000896493 dpw:TurnOnGreenMember dpw:OtherMember 2021-01-01 2021-09-30 0000896493 dpw:DPLendingMember dpw:OtherMember 2021-01-01 2021-09-30 0000896493 dpw:OtherMember 2021-01-01 2021-09-30 0000896493 dpw:GWWMember 2021-01-01 2021-09-30 0000896493 dpw:TurnOnGreenMember 2021-01-01 2021-09-30 0000896493 dpw:DPLendingMember 2021-01-01 2021-09-30 0000896493 dpw:GWWMember dpw:RFMicrowaveFiltersMember 2021-01-01 2021-09-30 0000896493 dpw:TurnOnGreenMember dpw:RFMicrowaveFiltersMember 2021-01-01 2021-09-30 0000896493 dpw:DPLendingMember dpw:RFMicrowaveFiltersMember 2021-01-01 2021-09-30 0000896493 dpw:RFMicrowaveFiltersMember 2021-01-01 2021-09-30 0000896493 dpw:GWWMember dpw:DetectorlogarithmicvideoamplifiersMember 2021-01-01 2021-09-30 0000896493 dpw:TurnOnGreenMember dpw:DetectorlogarithmicvideoamplifiersMember 2021-01-01 2021-09-30 0000896493 dpw:DPLendingMember dpw:DetectorlogarithmicvideoamplifiersMember 2021-01-01 2021-09-30 0000896493 dpw:DetectorlogarithmicvideoamplifiersMember 2021-01-01 2021-09-30 0000896493 dpw:GWWMember dpw:PowerSupplyUnitsMember 2021-01-01 2021-09-30 0000896493 dpw:TurnOnGreenMember dpw:PowerSupplyUnitsMember 2021-01-01 2021-09-30 0000896493 dpw:DPLendingMember dpw:PowerSupplyUnitsMember 2021-01-01 2021-09-30 0000896493 dpw:PowerSupplyUnitsMember 2021-01-01 2021-09-30 0000896493 dpw:GWWMember dpw:PowerSupplySystemsMember 2021-01-01 2021-09-30 0000896493 dpw:TurnOnGreenMember dpw:PowerSupplySystemsMember 2021-01-01 2021-09-30 0000896493 dpw:DPLendingMember dpw:PowerSupplySystemsMember 2021-01-01 2021-09-30 0000896493 dpw:PowerSupplySystemsMember 2021-01-01 2021-09-30 0000896493 dpw:GWWMember dpw:HealthcareDiagnosticSystemsMember 2021-01-01 2021-09-30 0000896493 dpw:TurnOnGreenMember dpw:HealthcareDiagnosticSystemsMember 2021-01-01 2021-09-30 0000896493 dpw:DPLendingMember dpw:HealthcareDiagnosticSystemsMember 2021-01-01 2021-09-30 0000896493 dpw:HealthcareDiagnosticSystemsMember 2021-01-01 2021-09-30 0000896493 dpw:GWWMember dpw:DefenseSystemsMember 2021-01-01 2021-09-30 0000896493 dpw:TurnOnGreenMember dpw:DefenseSystemsMember 2021-01-01 2021-09-30 0000896493 dpw:DPLendingMember dpw:DefenseSystemsMember 2021-01-01 2021-09-30 0000896493 dpw:DefenseSystemsMember 2021-01-01 2021-09-30 0000896493 dpw:DPLendingMember dpw:DigitalCurrencyMiningMember 2021-01-01 2021-09-30 0000896493 dpw:DigitalCurrencyMiningMember 2021-01-01 2021-09-30 0000896493 dpw:GWWMember dpw:OtherMember 2021-01-01 2021-09-30 0000896493 dpw:TurnOnGreenMember dpw:OtherMember 2021-01-01 2021-09-30 0000896493 dpw:DPLendingMember dpw:OtherMember 2021-01-01 2021-09-30 0000896493 dpw:OtherMember 2021-01-01 2021-09-30 0000896493 dpw:GWWMember dpw:GoodsTransferredAtAPointInTimeMember 2021-01-01 2021-09-30 0000896493 dpw:TurnOnGreenMember dpw:GoodsTransferredAtAPointInTimeMember 2021-01-01 2021-09-30 0000896493 dpw:DPLendingMember dpw:GoodsTransferredAtAPointInTimeMember 2021-01-01 2021-09-30 0000896493 dpw:GoodsTransferredAtAPointInTimeMember 2021-01-01 2021-09-30 0000896493 dpw:GWWMember dpw:ServicesTransferredOverTimeMember 2021-01-01 2021-09-30 0000896493 dpw:ServicesTransferredOverTimeMember 2021-01-01 2021-09-30 0000896493 dpw:GWWMember srt:NorthAmericaMember 2020-01-01 2020-09-30 0000896493 dpw:TurnOnGreenMember srt:NorthAmericaMember 2020-01-01 2020-09-30 0000896493 dpw:DPLendingMember srt:NorthAmericaMember 2020-01-01 2020-09-30 0000896493 srt:NorthAmericaMember 2020-01-01 2020-09-30 0000896493 dpw:GWWMember srt:EuropeMember 2020-01-01 2020-09-30 0000896493 dpw:TurnOnGreenMember srt:EuropeMember 2020-01-01 2020-09-30 0000896493 dpw:DPLendingMember srt:EuropeMember 2020-01-01 2020-09-30 0000896493 srt:EuropeMember 2020-01-01 2020-09-30 0000896493 dpw:GWWMember us-gaap:MiddleEastMember 2020-01-01 2020-09-30 0000896493 dpw:TurnOnGreenMember us-gaap:MiddleEastMember 2020-01-01 2020-09-30 0000896493 dpw:DPLendingMember us-gaap:MiddleEastMember 2020-01-01 2020-09-30 0000896493 us-gaap:MiddleEastMember 2020-01-01 2020-09-30 0000896493 dpw:GWWMember dpw:OtherMember 2020-01-01 2020-09-30 0000896493 dpw:TurnOnGreenMember dpw:OtherMember 2020-01-01 2020-09-30 0000896493 dpw:DPLendingMember dpw:OtherMember 2020-01-01 2020-09-30 0000896493 dpw:OtherMember 2020-01-01 2020-09-30 0000896493 dpw:GWWMember 2020-01-01 2020-09-30 0000896493 dpw:TurnOnGreenMember 2020-01-01 2020-09-30 0000896493 dpw:DPLendingMember 2020-01-01 2020-09-30 0000896493 dpw:GWWMember dpw:RFMicrowaveFiltersMember 2020-01-01 2020-09-30 0000896493 dpw:TurnOnGreenMember dpw:RFMicrowaveFiltersMember 2020-01-01 2020-09-30 0000896493 dpw:DPLendingMember dpw:RFMicrowaveFiltersMember 2020-01-01 2020-09-30 0000896493 dpw:RFMicrowaveFiltersMember 2020-01-01 2020-09-30 0000896493 dpw:GWWMember dpw:DetectorlogarithmicvideoamplifiersMember 2020-01-01 2020-09-30 0000896493 dpw:TurnOnGreenMember dpw:DetectorlogarithmicvideoamplifiersMember 2020-01-01 2020-09-30 0000896493 dpw:DPLendingMember dpw:DetectorlogarithmicvideoamplifiersMember 2020-01-01 2020-09-30 0000896493 dpw:DetectorlogarithmicvideoamplifiersMember 2020-01-01 2020-09-30 0000896493 dpw:GWWMember dpw:PowerSupplyUnitsMember 2020-01-01 2020-09-30 0000896493 dpw:TurnOnGreenMember dpw:PowerSupplyUnitsMember 2020-01-01 2020-09-30 0000896493 dpw:DPLendingMember dpw:PowerSupplyUnitsMember 2020-01-01 2020-09-30 0000896493 dpw:PowerSupplyUnitsMember 2020-01-01 2020-09-30 0000896493 dpw:GWWMember dpw:PowerSupplySystemsMember 2020-01-01 2020-09-30 0000896493 dpw:TurnOnGreenMember dpw:PowerSupplySystemsMember 2020-01-01 2020-09-30 0000896493 dpw:DPLendingMember dpw:PowerSupplySystemsMember 2020-01-01 2020-09-30 0000896493 dpw:PowerSupplySystemsMember 2020-01-01 2020-09-30 0000896493 dpw:GWWMember dpw:HealthcareDiagnosticSystemsMember 2020-01-01 2020-09-30 0000896493 dpw:TurnOnGreenMember dpw:HealthcareDiagnosticSystemsMember 2020-01-01 2020-09-30 0000896493 dpw:DPLendingMember dpw:HealthcareDiagnosticSystemsMember 2020-01-01 2020-09-30 0000896493 dpw:HealthcareDiagnosticSystemsMember 2020-01-01 2020-09-30 0000896493 dpw:GWWMember dpw:DefenseSystemsMember 2020-01-01 2020-09-30 0000896493 dpw:TurnOnGreenMember dpw:DefenseSystemsMember 2020-01-01 2020-09-30 0000896493 dpw:DPLendingMember dpw:DefenseSystemsMember 2020-01-01 2020-09-30 0000896493 dpw:DefenseSystemsMember 2020-01-01 2020-09-30 0000896493 dpw:GWWMember dpw:GoodsTransferredAtAPointInTimeMember 2020-01-01 2020-09-30 0000896493 dpw:TurnOnGreenMember dpw:GoodsTransferredAtAPointInTimeMember 2020-01-01 2020-09-30 0000896493 dpw:DPLendingMember dpw:GoodsTransferredAtAPointInTimeMember 2020-01-01 2020-09-30 0000896493 dpw:GoodsTransferredAtAPointInTimeMember 2020-01-01 2020-09-30 0000896493 dpw:GWWMember dpw:ServicesTransferredOverTimeMember 2020-01-01 2020-09-30 0000896493 dpw:ServicesTransferredOverTimeMember 2020-01-01 2020-09-30 0000896493 dpw:AVLPRelatedPartyMember dpw:PromissoryNoteMember us-gaap:FairValueMeasurementsRecurringMember 2021-09-30 0000896493 dpw:AVLPRelatedPartyMember dpw:PromissoryNoteMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel3Member 2021-09-30 0000896493 dpw:AVLPAndAlzamendMember dpw:ConvertiblePromissoryNoteMember us-gaap:FairValueMeasurementsRecurringMember 2021-09-30 0000896493 dpw:AVLPAndAlzamendMember dpw:ConvertiblePromissoryNoteMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel1Member 2021-09-30 0000896493 dpw:AVLPAndAlzamendMember dpw:ConvertiblePromissoryNoteMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel2Member 2021-09-30 0000896493 dpw:AVLPAndAlzamendMember dpw:ConvertiblePromissoryNoteMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel3Member 2021-09-30 0000896493 dpw:AvalancheInternationalCorpMember dpw:CommonStock11Member us-gaap:FairValueMeasurementsRecurringMember 2021-09-30 0000896493 dpw:AvalancheInternationalCorpMember dpw:CommonStock11Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel1Member 2021-09-30 0000896493 dpw:AvalancheInternationalCorpMember dpw:CommonStock11Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel2Member 2021-09-30 0000896493 dpw:AlzamendARelatedPartyMember dpw:CommonStock11Member us-gaap:FairValueMeasurementsRecurringMember 2021-09-30 0000896493 dpw:AlzamendARelatedPartyMember dpw:CommonStock11Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel1Member 2021-09-30 0000896493 dpw:AlzamendARelatedPartyMember dpw:CommonStock11Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel2Member 2021-09-30 0000896493 dpw:AvalancheInternationalCorpMember dpw:CommonStock11Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel3Member 2021-09-30 0000896493 dpw:MarketableEquitySecuritiesMember us-gaap:FairValueMeasurementsRecurringMember 2021-09-30 0000896493 dpw:MarketableEquitySecuritiesMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel1Member 2021-09-30 0000896493 dpw:MarketableEquitySecuritiesMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel2Member 2021-09-30 0000896493 dpw:DebtEquitySecuritiesMember us-gaap:FairValueMeasurementsRecurringMember 2021-09-30 0000896493 dpw:DebtEquitySecuritiesMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel2Member 2021-09-30 0000896493 dpw:DebtEquitySecuritiesMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel3Member 2021-09-30 0000896493 us-gaap:FairValueMeasurementsRecurringMember 2021-09-30 0000896493 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel1Member 2021-09-30 0000896493 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel2Member 2020-09-30 0000896493 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel3Member 2021-09-30 0000896493 dpw:AVLPAndAlzamendMember dpw:ConvertiblePromissoryNoteMember us-gaap:FairValueMeasurementsRecurringMember 2020-12-31 0000896493 dpw:AVLPAndAlzamendMember dpw:ConvertiblePromissoryNoteMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel1Member 2020-12-31 0000896493 dpw:AVLPAndAlzamendMember dpw:ConvertiblePromissoryNoteMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel2Member 2020-12-31 0000896493 dpw:AVLPAndAlzamendMember dpw:ConvertiblePromissoryNoteMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel3Member 2020-12-31 0000896493 dpw:AvalancheInternationalCorpMember dpw:CommonStock11Member us-gaap:FairValueMeasurementsRecurringMember 2020-12-31 0000896493 dpw:AvalancheInternationalCorpMember dpw:CommonStock11Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel1Member 2020-12-31 0000896493 dpw:AvalancheInternationalCorpMember dpw:CommonStock11Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel2Member 2020-12-31 0000896493 dpw:AvalancheInternationalCorpMember dpw:CommonStock11Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel3Member 2020-12-31 0000896493 dpw:AlzamendARelatedPartyMember dpw:CommonStock11Member us-gaap:FairValueMeasurementsRecurringMember 2020-12-31 0000896493 dpw:AlzamendARelatedPartyMember dpw:CommonStock11Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel1Member 2020-12-31 0000896493 dpw:AlzamendARelatedPartyMember dpw:CommonStock11Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel2Member 2020-12-31 0000896493 dpw:AlzamendARelatedPartyMember dpw:CommonStock11Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel3Member 2020-12-31 0000896493 dpw:MarketableEquitySecuritiesMember us-gaap:FairValueMeasurementsRecurringMember 2020-12-31 0000896493 dpw:MarketableEquitySecuritiesMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel1Member 2020-12-31 0000896493 dpw:MarketableEquitySecuritiesMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel2Member 2020-12-31 0000896493 dpw:DebtEquitySecuritiesMember us-gaap:FairValueMeasurementsRecurringMember 2020-12-31 0000896493 dpw:DebtEquitySecuritiesMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel2Member 2020-12-31 0000896493 dpw:DebtEquitySecuritiesMember us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel3Member 2020-12-31 0000896493 us-gaap:FairValueMeasurementsRecurringMember 2020-12-31 0000896493 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel1Member 2020-12-31 0000896493 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel2Member 2020-12-31 0000896493 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel3Member 2020-12-31 0000896493 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel3Member 2021-01-01 2021-06-30 0000896493 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel3Member 2021-06-30 0000896493 dpw:RestrictedStockGrantsMember 2021-01-01 2021-09-30 0000896493 us-gaap:EmployeeStockOptionMember 2021-01-01 2021-09-30 0000896493 us-gaap:EmployeeStockOptionMember 2020-01-01 2020-09-30 0000896493 us-gaap:WarrantMember 2021-01-01 2021-09-30 0000896493 us-gaap:WarrantMember 2020-01-01 2020-09-30 0000896493 dpw:ConvertibleNotesMember 2021-01-01 2021-09-30 0000896493 dpw:ConvertibleNotesMember 2020-01-01 2020-09-30 0000896493 dpw:ConversionOfPreferredStockMember 2021-01-01 2021-09-30 0000896493 dpw:ConversionOfPreferredStockMember 2020-01-01 2020-09-30 0000896493 us-gaap:CommonStockMember 2021-01-01 2021-09-30 0000896493 us-gaap:CommonStockMember 2021-09-30 0000896493 us-gaap:CommonStockMember 2020-01-01 2020-12-31 0000896493 us-gaap:CommonStockMember 2020-12-31 0000896493 dpw:StockPurchaseAgreementMember dpw:NakedBrandGroupLimitedMember 2021-01-01 2021-09-30 0000896493 dpw:NakedBrandGroupLimitedMember 2021-04-20 2021-04-22 0000896493 us-gaap:CommercialPortfolioSegmentMember 2020-12-31 0000896493 us-gaap:CommercialPortfolioSegmentMember 2021-01-01 2021-09-30 0000896493 us-gaap:CommercialPortfolioSegmentMember 2021-09-30 0000896493 dpw:BitcoinMinersMember 2021-01-01 2021-09-30 0000896493 dpw:BitcoinMinersMember 2021-09-30 0000896493 dpw:CryptocurrencyMachinesAndRelatedEquipmentMember 2021-09-30 0000896493 dpw:CryptocurrencyMachinesAndRelatedEquipmentMember 2020-12-31 0000896493 us-gaap:ComputerEquipmentMember 2021-09-30 0000896493 us-gaap:ComputerEquipmentMember 2020-12-31 0000896493 us-gaap:OfficeEquipmentMember 2021-09-30 0000896493 us-gaap:OfficeEquipmentMember 2020-12-31 0000896493 us-gaap:LandMember 2021-09-30 0000896493 us-gaap:LandMember 2020-12-31 0000896493 us-gaap:BuildingMember 2021-09-30 0000896493 us-gaap:BuildingMember 2020-12-31 0000896493 us-gaap:LeaseholdImprovementsMember 2021-09-30 0000896493 us-gaap:LeaseholdImprovementsMember 2020-12-31 0000896493 dpw:MichiganCloudDataCenterMember 2021-01-28 2021-01-29 0000896493 dpw:MichiganCloudDataCenterMember 2021-01-25 2021-01-29 0000896493 us-gaap:TrademarksAndTradeNamesMember 2021-09-30 0000896493 us-gaap:TrademarksAndTradeNamesMember 2020-12-31 0000896493 us-gaap:CustomerListsMember srt:MinimumMember 2021-01-01 2021-09-30 0000896493 us-gaap:CustomerListsMember srt:MaximumMember 2021-01-01 2021-09-30 0000896493 us-gaap:CustomerListsMember 2021-09-30 0000896493 us-gaap:CustomerListsMember 2020-12-31 0000896493 dpw:DomainNameAndOtherIntangibleAssetsMember 2021-01-01 2021-09-30 0000896493 dpw:DomainNameAndOtherIntangibleAssetsMember 2021-09-30 0000896493 dpw:DomainNameAndOtherIntangibleAssetsMember 2020-12-31 0000896493 dpw:AvalancheInternationalCorpAndAlzamendMember 2021-01-01 2021-09-30 0000896493 dpw:AvalancheInternationalCorpAndAlzamendMember 2020-01-01 2020-12-31 0000896493 2020-01-01 2020-12-31 0000896493 dpw:AvalancheInternationalCorpAndAlzamendMember dpw:WarrantsAndCommonStockMember 2020-12-31 0000896493 dpw:AvalancheInternationalCorpAndAlzamendMember dpw:ConvertiblePromissoryNoteMember 2020-12-31 0000896493 dpw:AvalancheInternationalCorpAndAlzamendMember 2020-12-31 0000896493 dpw:AvalancheInternationalCorpAndAlzamendMember dpw:WarrantsAndCommonStockMember 2021-01-01 2021-09-30 0000896493 dpw:AvalancheInternationalCorpAndAlzamendMember dpw:ConvertiblePromissoryNoteMember 2021-01-01 2021-09-30 0000896493 dpw:AvalancheInternationalCorpAndAlzamendMember dpw:WarrantsAndCommonStockMember 2021-09-30 0000896493 dpw:AvalancheInternationalCorpAndAlzamendMember dpw:ConvertiblePromissoryNoteMember 2021-09-30 0000896493 dpw:AvalancheInternationalCorpAndAlzamendMember 2021-09-30 0000896493 dpw:AvalancheInternationalCorpMember dpw:PhilouVenturesLLCMember 2021-09-30 0000896493 dpw:AvalancheInternationalCorpMember 2021-01-01 2021-09-30 0000896493 dpw:AvalancheInternationalCorpMember dpw:ConvertiblePromissoryNoteTenMember 2021-09-30 0000896493 dpw:AvalancheInternationalCorpMember dpw:PhilouVenturesLLCMember dpw:OwnershipMember 2021-09-30 0000896493 dpw:LoanAgreementMember 2021-04-13 0000896493 dpw:LoanAgreementMember 2021-06-04 0000896493 dpw:AlzamendMember 2021-09-30 0000896493 dpw:AlzamendMember 2021-09-30 0000896493 dpw:AlzamendMember 2021-06-30 0000896493 dpw:AlzamendMember dpw:SecuritiesPurchaseAgreementMember 2021-03-11 2021-03-12 0000896493 dpw:AlzamendMember dpw:SecuritiesPurchaseAgreementMember 2021-03-09 0000896493 us-gaap:IPOMember 2021-06-15 0000896493 us-gaap:IPOMember 2021-06-14 2021-06-15 0000896493 dpw:AlzamendMember us-gaap:WarrantMember 2021-09-30 0000896493 dpw:AlzamendMember us-gaap:WarrantMember srt:MinimumMember 2021-01-01 2021-09-30 0000896493 dpw:AlzamendMember us-gaap:WarrantMember srt:MaximumMember 2021-01-01 2021-09-30 0000896493 dpw:AlzamendMember us-gaap:WarrantMember 2021-01-01 2021-09-30 0000896493 dpw:AultAndCompanyIncMember 2021-02-25 0000896493 dpw:AultAlphaLLPMember 2021-09-30 0000896493 dpw:ExecutiveChairmanRelocationBenefitMember 2021-02-22 2021-02-23 0000896493 dpw:ExecutiveChairmanRelocationBenefitMember 2021-04-01 2021-04-30 0000896493 dpw:ExercisePriceRange1Member 2021-01-01 2021-09-30 0000896493 dpw:ExercisePriceRange1Member 2021-09-30 0000896493 dpw:ExercisePriceRange1Member 2021-06-30 0000896493 dpw:ExercisePriceRange2Member 2021-01-01 2021-09-30 0000896493 dpw:ExercisePriceRange2Member 2021-09-30 0000896493 dpw:ExercisePriceRange3Member 2021-01-01 2021-09-30 0000896493 dpw:ExercisePriceRange3Member 2021-09-30 0000896493 dpw:ExercisePriceRange4Member 2021-01-01 2021-06-30 0000896493 dpw:ExercisePriceRange4Member 2021-01-01 2021-09-30 0000896493 dpw:ExercisePriceRange4Member 2021-09-30 0000896493 dpw:IssuancesOutsideOfPlansMember 2021-01-01 2021-09-30 0000896493 dpw:IssuancesOutsideOfPlansMember 2021-09-30 0000896493 dpw:IssuancesOutsideOfPlans1Member 2021-01-01 2021-09-30 0000896493 dpw:IssuancesOutsideOfPlans1Member 2021-09-30 0000896493 dpw:IssuancesOutsideOfPlans2Member 2021-01-01 2021-09-30 0000896493 dpw:IssuancesOutsideOfPlans2Member 2021-09-30 0000896493 dpw:TotalOptionsMember 2021-01-01 2021-09-30 0000896493 dpw:TotalOptionsMember 2021-09-30 0000896493 srt:ChiefExecutiveOfficerMember us-gaap:CommonStockMember srt:SubsidiariesMember 2021-05-24 2021-05-25 0000896493 srt:ChiefExecutiveOfficerMember us-gaap:CommonStockMember srt:SubsidiariesMember 2021-05-25 0000896493 us-gaap:CommonClassAMember 2021-05-25 0000896493 us-gaap:CommonClassBMember 2021-05-25 0000896493 2021-05-25 0000896493 dpw:MrReadAndMrLongMember 2021-09-30 0000896493 dpw:MrReadAndMrLongMember 2021-01-01 2021-09-30 0000896493 dpw:ExercisePrice1Member 2021-09-30 0000896493 dpw:ExercisePrice1Member 2021-01-01 2021-09-30 0000896493 dpw:ExercisePrice1Member 2021-06-30 0000896493 dpw:ExercisePrice2Member srt:MinimumMember 2021-09-30 0000896493 dpw:ExercisePrice2Member srt:MaximumMember 2021-09-30 0000896493 dpw:ExercisePrice2Member 2021-09-30 0000896493 dpw:ExercisePrice2Member 2021-01-01 2021-09-30 0000896493 dpw:ExercisePrice3Member srt:MinimumMember 2021-09-30 0000896493 dpw:ExercisePrice3Member srt:MaximumMember 2021-09-30 0000896493 dpw:ExercisePrice3Member 2021-09-30 0000896493 dpw:ExercisePrice3Member 2021-01-01 2021-09-30 0000896493 dpw:ExercisePrice4Member srt:MinimumMember 2021-09-30 0000896493 dpw:ExercisePrice4Member srt:MaximumMember 2021-09-30 0000896493 dpw:ExercisePrice4Member 2021-09-30 0000896493 dpw:ExercisePrice4Member 2021-01-01 2021-09-30 0000896493 dpw:ExercisePrice5Member srt:MinimumMember 2021-09-30 0000896493 dpw:ExercisePrice5Member srt:MaximumMember 2021-09-30 0000896493 dpw:ExercisePrice5Member 2021-09-30 0000896493 dpw:ExercisePrice5Member 2021-01-01 2021-09-30 0000896493 dpw:ExercisePrice1Member srt:MinimumMember 2021-09-30 0000896493 dpw:ExercisePrice6Member srt:MaximumMember 2021-09-30 0000896493 dpw:ExercisePrice6Member 2021-09-30 0000896493 dpw:ExercisePrice6Member 2021-01-01 2021-09-30 0000896493 us-gaap:WarrantMember srt:MinimumMember 2021-09-30 0000896493 us-gaap:WarrantMember srt:MaximumMember 2021-09-30 0000896493 us-gaap:WarrantMember srt:MinimumMember 2021-01-01 2021-09-30 0000896493 us-gaap:WarrantMember srt:MaximumMember 2021-01-01 2021-09-30 0000896493 us-gaap:WarrantMember 2021-01-01 2021-09-30 0000896493 dpw:EsousaPurchasedPromissoryNotesMember 2021-09-30 0000896493 dpw:EsousaPurchasedPromissoryNotesMember 2020-12-31 0000896493 dpw:ShortTermNotesMember 2021-09-30 0000896493 dpw:ShortTermNotesMember 2020-12-31 0000896493 dpw:NotesPayableToWellsFargoMember 2021-09-30 0000896493 dpw:NotesPayableToWellsFargoMember 2020-12-31 0000896493 dpw:NotePayableToDeptOfEconomicAndCommunityDevelopmentMember 2021-09-30 0000896493 dpw:NotePayableToDeptOfEconomicAndCommunityDevelopmentMember 2020-12-31 0000896493 dpw:PaycheckProtectionProgramLoansMember 2021-09-30 0000896493 dpw:PaycheckProtectionProgramLoansMember 2020-12-31 0000896493 dpw:SBAEconomicInjuryDisasterLoanMember 2021-09-30 0000896493 dpw:SBAEconomicInjuryDisasterLoanMember 2020-12-31 0000896493 dpw:ShortTermNotes1Member 2021-09-30 0000896493 dpw:ShortTermBankCreditMember 2021-09-30 0000896493 dpw:ShortTermBankCreditMember 2020-12-31 0000896493 us-gaap:InvestorMember us-gaap:CommonStockMember 2021-01-30 2021-01-31 0000896493 dpw:PaycheckProtectionProgramLoansMember 2020-04-30 0000896493 dpw:PaycheckProtectionProgramLoansMember 2021-01-11 0000896493 dpw:PaycheckProtectionProgramLoansMember dpw:MicrophaseCorporationMember 2021-05-20 0000896493 dpw:ConvertibleDebtThreeMember 2021-09-30 0000896493 dpw:ConvertibleDebtThreeMember 2020-12-31 0000896493 dpw:SecuritiesPurchaseAgreementMember dpw:ConvertiblePromissoryNoteTwelveMember us-gaap:InvestorMember 2019-05-20 0000896493 dpw:SecuritiesPurchaseAgreementMember dpw:ConvertiblePromissoryNoteTwelveMember us-gaap:InvestorMember 2021-09-30 0000896493 dpw:SecuritiesPurchaseAgreementMember dpw:ConvertiblePromissoryNoteTwelveMember us-gaap:InvestorMember 2021-01-01 2021-09-30 0000896493 us-gaap:MeasurementInputRiskFreeInterestRateMember 2021-09-30 0000896493 us-gaap:MeasurementInputPriceVolatilityMember 2021-09-30 0000896493 dpw:BlockchainMiningSupplyAndServicesLtdMember 2018-11-27 2018-11-28 0000896493 us-gaap:SeriesCPreferredStockMember 2021-09-30 0000896493 dpw:SalesAgreement2021Member 2021-01-20 2021-01-22 0000896493 dpw:SalesAgreement2021Member 2021-03-04 2021-03-05 0000896493 dpw:EsousaHoldingsLLCMember 2021-01-28 2021-01-31 0000896493 dpw:EsousaHoldingsLLCMember 2021-01-31 0000896493 2021-05-11 2021-05-12 0000896493 dpw:SecuritiesPurchaseAgreementMember 2021-06-10 2021-06-12 0000896493 dpw:SecuritiesPurchaseAgreementMember 2021-06-11 0000896493 us-gaap:OperatingSegmentsMember dpw:GWWMember 2021-07-01 2021-09-30 0000896493 us-gaap:OperatingSegmentsMember dpw:CoolisysMember 2021-07-01 2021-09-30 0000896493 us-gaap:OperatingSegmentsMember dpw:AultMember 2021-07-01 2021-09-30 0000896493 us-gaap:OperatingSegmentsMember 2021-07-01 2021-09-30 0000896493 us-gaap:OperatingSegmentsMember dpw:GWWMember 2021-09-30 0000896493 us-gaap:OperatingSegmentsMember dpw:CoolisysMember 2021-09-30 0000896493 us-gaap:OperatingSegmentsMember dpw:AultMember 2021-09-30 0000896493 us-gaap:OperatingSegmentsMember 2021-09-30 0000896493 us-gaap:OperatingSegmentsMember dpw:GWWMember 2020-07-01 2020-09-30 0000896493 us-gaap:OperatingSegmentsMember dpw:CoolisysMember 2020-07-01 2020-09-30 0000896493 us-gaap:OperatingSegmentsMember dpw:AultMember 2020-07-01 2020-09-30 0000896493 us-gaap:OperatingSegmentsMember 2020-07-01 2020-09-30 0000896493 us-gaap:OperatingSegmentsMember dpw:GWWMember 2020-09-30 0000896493 us-gaap:OperatingSegmentsMember dpw:CoolisysMember 2020-09-30 0000896493 us-gaap:OperatingSegmentsMember dpw:AultMember 2020-09-30 0000896493 us-gaap:OperatingSegmentsMember 2020-09-30 0000896493 us-gaap:OperatingSegmentsMember dpw:GWWMember 2021-01-01 2021-09-30 0000896493 us-gaap:OperatingSegmentsMember dpw:CoolisysMember 2021-01-01 2021-09-30 0000896493 us-gaap:OperatingSegmentsMember dpw:AultMember 2021-01-01 2021-09-30 0000896493 us-gaap:OperatingSegmentsMember 2021-01-01 2021-09-30 0000896493 us-gaap:OperatingSegmentsMember dpw:GWWMember 2020-01-01 2020-09-30 0000896493 us-gaap:OperatingSegmentsMember dpw:CoolisysMember 2020-01-01 2020-09-30 0000896493 us-gaap:OperatingSegmentsMember dpw:AultMember 2020-01-01 2020-09-30 0000896493 us-gaap:OperatingSegmentsMember 2020-01-01 2020-09-30 0000896493 us-gaap:SalesRevenueNetMember us-gaap:CustomerConcentrationRiskMember dpw:CustomerAMember 2021-07-01 2021-09-30 0000896493 us-gaap:SalesRevenueNetMember us-gaap:CustomerConcentrationRiskMember dpw:CustomerAMember 2021-01-01 2021-09-30 0000896493 us-gaap:SalesRevenueNetMember us-gaap:CustomerConcentrationRiskMember dpw:CustomerAMember 2020-07-01 2020-09-30 0000896493 us-gaap:SalesRevenueNetMember us-gaap:CustomerConcentrationRiskMember dpw:CustomerAMember 2020-01-01 2020-09-30 0000896493 us-gaap:SalesRevenueNetMember us-gaap:CustomerConcentrationRiskMember dpw:CustomerBMember 2020-07-01 2020-09-30 0000896493 us-gaap:SalesRevenueNetMember us-gaap:CustomerConcentrationRiskMember dpw:CustomerBMember 2020-01-01 2020-09-30 0000896493 us-gaap:SubsequentEventMember dpw:SalesAgreementMember 2021-11-17 2021-11-18 0000896493 dpw:SecuritiesPurchaseAgreementMember us-gaap:SubsequentEventMember 2021-10-01 2021-10-31 0000896493 dpw:SecuritiesPurchaseAgreementMember us-gaap:SubsequentEventMember 2021-10-31 0000896493 dpw:SecuritiesPurchaseAgreementMember us-gaap:CommonStockMember us-gaap:SubsequentEventMember 2021-11-14 2021-11-15 0000896493 dpw:EachIndependentDirectorMember us-gaap:SubsequentEventMember 2021-11-01 2021-11-09 0000896493 dpw:MiltonCMember us-gaap:SubsequentEventMember 2021-11-01 2021-11-09 0000896493 dpw:WilliamHomeCMember us-gaap:SubsequentEventMember 2021-11-01 2021-11-09 0000896493 dpw:HenryNisserMember us-gaap:SubsequentEventMember 2021-11-01 2021-11-09 0000896493 dpw:KennethCragunMember us-gaap:SubsequentEventMember 2021-11-01 2021-11-09 0000896493 dpw:ExecutiveChairmanAndOtherMember us-gaap:SubsequentEventMember 2021-11-01 2021-11-09 0000896493 dpw:CertainEmployeesMember us-gaap:SubsequentEventMember 2021-11-01 2021-11-09 0000896493 us-gaap:SubsequentEventMember dpw:StockIncentivePlan2021Member 2021-11-01 2021-11-09 0000896493 us-gaap:SubsequentEventMember dpw:StockIncentivePlan2021Member 2021-11-08 2021-11-09 0000896493 us-gaap:SubsequentEventMember dpw:StockIncentivePlan2021Member dpw:CertainEmployeesMember 2021-11-01 2021-11-09 0000896493 us-gaap:SubsequentEventMember dpw:TurnOnGreenMember 2021-11-05 0000896493 us-gaap:SubsequentEventMember dpw:TurnOnGreenMember 2021-11-04 2021-11-05 0000896493 us-gaap:SubsequentEventMember dpw:TurnOnGreenMember 2021-11-30 iso4217:USD xbrli:shares iso4217:USD xbrli:shares xbrli:pure dpw:Number utr:sqft

 

 

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

 

þ Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
  For the quarterly period ended September 30, 2021  

 

o Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
  For the transition period from ________ to ________.  

 

Commission file number 1-12711

 

AULT GLOBAL HOLDINGS, INC. 

(Exact name of registrant as specified in its charter)

 

Delaware 94-1721931
(State or other jurisdiction of incorporation or
organization)
 (I.R.S. Employer Identification Number)

 

 

11411 Southern Highlands Pkwy #240

Las Vegas, NV 89141

(Address of principal executive offices) (Zip code)

 

(949) 444-5464

(Registrant’s telephone number, including area code)

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class   Trading Symbol(s)   Name of each exchange on which registered
Class A Common Stock, $0.001 par value   DPW   NYSE American

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding year (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  þ    No  ¨

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Date File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes  þ    No  ¨

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer  ¨ Accelerated filer  ¨
Non-accelerated filer  þ Smaller reporting company  þ
Emerging growth company  ¨  

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes  ¨    No  þ

 

At November 18, 2021 the registrant had outstanding 81,924,987 shares of common stock.

 

 

 

   
 

 

AULT GLOBAL HOLDINGS, INC.

TABLE OF CONTENTS

 

      Page
PART I – FINANCIAL INFORMATION  
       
Item 1.   Financial Statements (Unaudited)  
       
    Condensed Consolidated Balance Sheets as of September 30, 2021 and December 31, 2020 F-1
       
    Condensed Consolidated Statements of Operations and Comprehensive Loss for the
three and nine months ended September 30, 2021 and 2020
F-3
       
    Condensed Consolidated Statements of Changes in Stockholders’ Equity for the three
and nine months ended September 30, 2021 and 2020
F-4
       
    Condensed Consolidated Statements of Cash Flows for the nine months ended
September 30, 2021 and 2020
F-8
       
    Notes to Condensed Consolidated Financial Statements F-10
       
Item 2.   Management’s Discussion and Analysis of Financial Condition and Results of Operations 1
       
Item 3.    Quantitative and Qualitative Disclosures about Market Risk 14
       
Item 4.   Controls and Procedures 14
       
PART II – OTHER INFORMATION  
       
Item 1.   Legal Proceedings 16
Item 1A.   Risk Factors 18
Item 2.   Unregistered Sales of Equity Securities and Use of Proceeds 18
Item 3.   Defaults Upon Senior Securities 18
Item 4.   Mine Safety Disclosures 18
Item 5.   Other Information 18
Item 6.   Exhibits 19

 

Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements that involve a number of risks and uncertainties. Words such as “anticipates,” “expects,” “intends,” “goals,” “plans,” “believes,” “seeks,” “estimates,” “continues,” “may,” “will,” “would,” “should,” “could,” and variations of such words and similar expressions are intended to identify such forward-looking statements. In addition, any statements that refer to projections of our future financial performance, our anticipated growth and trends in our businesses, uncertain events or assumptions, and other characterizations of future events or circumstances are forward-looking statements. Such statements are based on management’s expectations as of the date of this filing and involve many risks and uncertainties that could cause our actual results to differ materially from those expressed or implied in our forward-looking statements. Such risks and uncertainties include those described throughout this report and our Annual Report on Form 10-K for the year ended December 31, 2020, particularly the “Risk Factors” sections of such reports. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. Readers are urged to carefully review and consider the various disclosures made in this Form 10-Q and in other documents we file from time to time with the Securities and Exchange Commission that disclose risks and uncertainties that may affect our business. The forward-looking statements in this Form 10-Q do not reflect the potential impact of any divestitures, mergers, acquisitions, or other business combinations that had not been completed as of the date of filing of this Quarterly Report on Form 10-Q. In addition, the forward-looking statements in this Form 10-Q are made as of the date of this filing, and we do not undertake, and expressly disclaim any duty to update such statements, whether as a result of new information, new developments or otherwise, except to the extent that disclosure may be required by law.

 

   
 

 

PART I – FINANCIAL INFORMATION

 

Item 1. Financial Statements.

 

AULT GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS 

(Unaudited)

 

                 
    September 30,     December 31,  
    2021     2020  
ASSETS                
                 
CURRENT ASSETS                
Cash and cash equivalents   $ 44,047,000     $ 18,680,000  
Marketable equity securities     49,931,000       2,563,000  
Accounts receivable     5,115,000       3,852,000  
Accounts and other receivable, related party     1,196,000       1,196,000  
Accrued revenue     1,857,000       1,696,000  
Inventories     3,842,000       3,374,000  
Prepaid expenses and other current assets     7,987,000       2,988,000  
TOTAL CURRENT ASSETS     113,975,000       34,349,000  
                 
Intangible assets, net     4,069,000       4,390,000  
Goodwill     9,606,000       9,646,000  
Property and equipment, net     29,550,000       2,123,000  
Right-of-use assets     5,201,000       4,318,000  
Investment in promissory notes, related parties     19,194,000       10,668,000  
Investments in common stock and warrants, related parties     24,911,000       6,139,000  
Investments in debt and equity securities     9,924,000       262,000  
Investment in limited partnership     1,869,000       1,869,000  
Loans receivable     5,877,000       750,000  
Other investments, related parties     780,000       803,000  
Other assets     765,000       326,000  
TOTAL ASSETS   $ 225,721,000     $ 75,643,000  
                 
LIABILITIES AND STOCKHOLDERS’ EQUITY                
                 
CURRENT LIABILITIES                
Accounts payable and accrued expenses   $ 9,361,000     $ 10,579,000  
Accounts payable and accrued expenses, related party     26,000       36,000  
Operating lease liability, current     1,014,000       524,000  
Revolving credit facility     -       125,000  
Notes payable, net     1,697,000       4,048,000  
Notes payable, related parties     -       188,000  
Convertible notes payable, related party     -       400,000  
Warrant liability     4,322,000       4,192,000  
Other current liabilities     3,608,000       1,790,000  
TOTAL CURRENT LIABILITIES     20,028,000       21,882,000  

 

 

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

 

  F- 1  
 

 

AULT GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (continued)

(Unaudited)

 

                 
    September 30,     December 31,  
    2021     2020  
LONG-TERM LIABILITIES                
Operating lease liability, non-current     4,265,000       3,855,000  
Notes payable     -       336,000  
Notes payable, related parties     -       52,000  
Convertible notes payable     447,000       386,000  
                 
TOTAL LIABILITIES     24,740,000       26,511,000  
                 
COMMITMENTS AND CONTINGENCIES                
                 
STOCKHOLDERS’ EQUITY                
Series A Convertible Preferred Stock, $25.00 stated value per share,     -       -  
   $0.001 par value – 1,000,000 shares authorized; 7,040 shares                
   issued and outstanding at September 30, 2021 and December 31, 2020                
   (redemption amount and liquidation preference of $176,000 as of                
   September 30, 2021 and December 31, 2020)                
Series B Convertible Preferred Stock, $10 stated value per share,     -       -  
   share, $0.001 par value – 500,000 shares authorized; 125,000 shares issued                
   and outstanding at September 30, 2021 and December 31, 2020 (liquidation                
   preference of $1,250,000 at September 30, 2021 and December 31, 2020)                
Class A Common Stock, $0.001 par value – 500,000,000 shares authorized;     63,000       28,000  
  63,346,921 and 27,753,562 shares issued and outstanding at September 30, 2021                
   and December 31, 2020, respectively                
Class B Common Stock, $0.001 par value – 25,000,000 shares authorized;     -       -  
 nil shares issued and outstanding at September 30, 2021 and December 31, 2020                
Additional paid-in capital     331,886,000       171,396,000  
Accumulated deficit     (120,066,000 )     (121,396,000 )
Accumulated other comprehensive loss     (9,631,000 )     (1,718,000 )
Treasury stock, at cost     (2,773,000 )     -  
TOTAL AULT GLOBAL HOLDINGS STOCKHOLDERS’ EQUITY     199,479,000       48,310,000  
                 
Non-controlling interest     1,502,000       822,000  
                 
TOTAL STOCKHOLDERS’ EQUITY     200,981,000       49,132,000  
                 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY   $ 225,721,000     $ 75,643,000  

 

 

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

 

  F- 2  
 

 

AULT GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Unaudited)

 

                                 
    For the Three Months Ended     For the Nine Months Ended  
    September 30,     September 30,  
    2021     2020     2021     2020  
                         
Revenue   $ 7,803,000     $ 5,705,000     $ 24,272,000     $ 16,709,000  
Revenue, cryptocurrency mining     272,000       -       693,000       -  
Revenue, lending and trading activities     (38,869,000 )     (29,000 )     19,615,000       (27,000 )
Total revenue     (30,794,000 )     5,676,000       44,580,000       16,682,000  
Cost of revenue     5,271,000       3,736,000       16,657,000       11,085,000  
Gross profit (loss)     (36,065,000 )     1,940,000       27,923,000       5,597,000  
                                 
Operating expenses                                
Research and development     524,000       469,000       1,657,000       1,372,000  
Selling and marketing     1,993,000       260,000       4,740,000       893,000  
General and administrative     11,292,000       2,836,000       24,376,000       8,656,000  
Total operating expenses     13,809,000       3,565,000       30,773,000       10,921,000  
                                 
Loss from continuing operations     (49,874,000 )     (1,625,000 )     (2,850,000 )     (5,324,000 )
Other income (expenses)                                
Interest income     125,000       102,000       176,000       139,000  
Accretion of discount on note receivable, related party     4,210,000       -       4,210,000       -  
Interest expense     (140,000 )     (2,366,000 )     (475,000 )     (4,414,000 )
Change in fair value of marketable equity securities     (750,000 )     (29,000 )     (705,000 )     (58,000 )
Realized gain on marketable securities     30,000       -       428,000       -  
Gain (loss) on extinguishment of debt     -       (12,823,000 )     929,000       (13,298,000 )
Change in fair value of warrant liability     259,000       -       (130,000 )     (6,000 )
Total other income (expenses), net     3,734,000       (15,116,000 )     4,433,000       (17,637,000 )
                                 
Income (loss) from continuing operations before income taxes     (46,140,000 )     (16,741,000 )     1,583,000       (22,961,000 )
Income tax (provision) benefit     3,366,000       6,000       (144,000 )     18,000  
Net income (loss) from continuing operations     (42,774,000 )     (16,735,000 )     1,439,000       (22,943,000 )
Net loss from discontinued operations, net of taxes     -       -       -       (1,698,000 )
Net income (loss)     (42,774,000 )     (16,735,000 )     1,439,000       (24,641,000 )
Net loss attributable to non-controlling interest     (96,000 )     -       (93,000 )     -  
Net income (loss) attributable to Ault Global Holdings     (42,870,000 )     (16,735,000 )     1,346,000       (24,641,000 )
Preferred dividends     (4,000 )     (3,000 )     (13,000 )     (10,000 )
Net income (loss) available to common stockholders   $ (42,874,000 )   $ (16,738,000 )   $ 1,333,000     $ (24,651,000 )
Basic net income (loss) per common share:                                
Continuing operations   $ (0.73 )   $ (1.69 )   $ 0.03     $ (3.40 )
Discontinued operations     -       -       -       (0.25 )
Net income (loss) per common share   $ (0.73 )   $ (1.69 )   $ 0.03     $ (3.65 )
                                 
Diluted net income (loss) per common share:                                
Continuing operations   $ (0.73 )   $ (1.69 )   $ 0.03     $ (3.40 )
Discontinued operations     -       -       -       (0.25 )
Net income (loss) per common share   $ (0.73 )   $ (1.69 )   $ 0.03     $ (3.65 )
                                 
Weighted average basic common shares outstanding     58,987,000       9,879,000       49,714,000       6,759,000  
Weighted average diluted common shares outstanding     58,987,000       9,879,000       50,145,000       6,759,000  
Comprehensive loss                                
Net income (loss) available to common stockholders   $ (42,874,000 )   $ (16,738,000 )   $ 1,333,000     $ (24,651,000 )
Other comprehensive income (loss)                                
Foreign currency translation adjustment     (182,000 )     44,000       (141,000 )     (8,000 )
Net unrealized gain (loss) on derivative securities of related party     (4,849,000 )     1,561,000       (7,773,000 )     1,080,000  
Other comprehensive income (loss)     (5,031,000 )     1,605,000       (7,914,000 )     1,072,000  
Total comprehensive loss   $ (47,905,000 )   $ (15,133,000 )   $ (6,581,000 )   $ (23,579,000 )

 

 

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

 

  F- 3  
 

 

AULT GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (Unaudited)

Three Months Ended September 30, 2021

 

 

                                                             
    Series A & B                 Additional           Other                 Total  
    Preferred Stock     Common Stock     Paid-In     Accumulated     Comprehensive     Non-Controlling     Treasury     Stockholders’  
    Shares     Amount     Shares     Amount     Capital     Deficit     Loss     Interest     Stock     Equity  
                                                             
BALANCES, July 1, 2021     132,040     $ -       56,159,963     $ 56,000     $ 311,759,000     $ (77,190,000 )   $ (4,600,000 )   $ 1,364,000     $ -     $ 231,389,000  
Issuance of common stock for restricted stock awards     -       -       449,373       -       -       -       -       -       -       -  
Stock-based compensation:                                                                                
Options     -       -       -       -       1,794,000       -       -       -       -       1,794,000  
Restricted stock awards     -       -       -       -       2,312,000       -       -       -       -       2,312,000  
Issuance of stock options at Gresham Worldwide     -       -       -       -       -       -       -       42,000       -       42,000  
Issuance of common stock for cash     -       -       6,737,585       7,000       16,432,000       -       -       -       -       16,439,000  
Financing cost in connection with sales of common stock     -       -       -       -       (411,000 )     -       -       -       -       (411,000 )
Adjustment to treasury stock for holdings in investment
partnerships
    -       -       -       -       -       -       -       -       (2,773,000 )     (2,773,000 )
Comprehensive loss:                                                                                
Net loss     -       -       -       -       -       (42,870,000 )     -       -       -       (42,870,000 )
Preferred dividends     -       -       -       -       -       (4,000 )     -       -       -       (4,000 )
Net unrealized gain on derivatives  in related party     -       -       -       -       -       -       (4,849,000 )     -       -       (4,849,000 )
Foreign currency translation adjustments     -       -       -       -       -       -       (182,000 )     -       -       (182,000 )
Net income attributable to non-controlling interest     -       -       -       -       -       -       -       96,000       -       96,000  
Other     -       -       -       -       -       (2,000 )     -       -       -       (2,000 )
                                                                                 
BALANCES, September 30, 2021     132,040     $ -       63,346,921     $ 63,000     $ 331,886,000     $ (120,066,000 )   $ (9,631,000 )   $ 1,502,000     $ (2,773,000 )   $ 200,981,000  

 

 

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

 

  F- 4  
 

 

AULT GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (Unaudited)

Three Months Ended September 30, 2020

 

 

                                                       
    Series A & B                 Additional           Other           Total  
    Preferred Stock     Common Stock     Paid-In     Accumulated     Comprehensive     Non-Controlling     Stockholders’  
    Shares     Amount     Shares     Amount     Capital     Deficit     Loss     Interest     Equity  
                                                       
BALANCES, July 1, 2020     132,040     $       6,112,117     $ 6,000     $ 105,626,000     $ (96,565,000 )   $ (6,044,000 )   $ 8,000     $ 3,031,000  
Stock-based compensation:                                                                        
Options                             20,000                         20,000  
Common stock                 37,500             109,000                         109,000  
Issuance of common stock for conversion                                                                        
  of debt                 5,323,793       5,000       14,017,000                         14,022,000  
Beneficial conversion feature in connection                                                                        
 with convertible notes                             15,000                         15,000  
Fair value of warrants issued in connection                                                                        
 with convertible notes                               2,482,000                         2,482,000  
Cash for exchange fees and other financing costs                             (25,000 )                       (25,000 )
Comprehensive loss:                                                                        
Net loss                                     (16,735,000 )                 (16,735,000 )
Preferred dividends                                   (3,000 )                 (3,000 )
Net unrealized gain on derivatives                                                                        
  in related party                                         1,561,000             1,561,000  
Foreign currency translation adjustments                                         45,000             44,000  
Other                                   1,000                   1,000  
                                                                         
BALANCES, September 30, 2020     132,040     $       11,473,410     $ 11,000     $ 122,244,000     $ (113,302,000 )   $ (4,439,000 )   $ 8,000     $ 4,522,000  

 

 

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

 

  F- 5  
 

 

AULT GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (Unaudited)

Nine Months Ended September 30, 2021

 

 

                                                             
    Series A & B                 Additional           Other                 Total  
    Preferred Stock     Common Stock     Paid-In     Accumulated     Comprehensive     Non-Controlling     Treasury     Stockholders’  
    Shares     Amount     Shares     Amount     Capital     Deficit     Loss     Interest     Stock     Equity  
                                                             
BALANCES, January 1, 2021     132,040     $ -       27,753,562     $ 28,000     $ 171,396,000     $ (121,396,000 )   $ (1,718,000 )   $ 822,000     $ -     $ 49,132,000  
Issuance of common stock for restricted stock awards     -       -       449,373       -       -       -       -       -       -       -  
Stock-based compensation:                                                                                
Options     -       -       -       -       1,833,000       -       -       -       -       1,833,000  
Restricted stock awards     -       -       -       -       2,312,000       -       -       -       -       2,312,000  
Issuance of stock options at Gresham Worldwide     -       -       -       -       -       -       -       587,000       -       587,000  
Issuance of common stock for cash     -       -       34,684,910       35,000       160,448,000       -       -       -       -       160,483,000  
Financing cost in connection with sales of common
stock
    -       -       -       -       (4,952,000 )     -       -       -       -       (4,952,000 )
Adjustment to treasury stock for holdings in
investment partnerships
    -       -       -       -       -       -       -       -       (2,773,000 )     (2,773,000 )
Issuance of common stock for conversion                                                             -       -       -  
  of convertible notes payable     -       -       183,214       -       449,000       -       -       -       -       449,000  
Issuance of common stock for conversion                                                             -       -       -  
  of convertible notes payable, related party     -       -       275,862       -       400,000       -       -       -       -       400,000  
Comprehensive loss:                                                             -       -       -  
Net income     -       -       -       -       -       1,346,000       -       -       -       1,346,000  
Preferred dividends             -       -       -       -       (13,000 )     -       -       -       (13,000 )
Net unrealized loss on derivatives in related party     -       -       -       -       -       -       (7,773,000 )     -       -       (7,773,000 )
Foreign currency translation adjustments     -       -       -       -       -       -       (141,000 )     -       -       (141,000 )
Net income attributable to non-controlling interest     -       -       -       -       -       -       -       93,000       -       93,000  
Other     -       -       -       -       -       (3,000 )     1,000       -       -       (2,000 )
                                                                                 
BALANCES, September 30, 2021     132,040     $ -       63,346,921     $ 63,000     $ 331,886,000     $ (120,066,000 )   $ (9,631,000 )   $ 1,502,000     $ (2,773,000 )   $ 200,981,000  

 

 

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

 

  F- 6  
 

 

AULT GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (Unaudited)

Nine Months Ended September 30, 2020

 

 

                                        Accumulated              
    Series A & B                 Additional           Other           Total  
    Preferred Stock     Common Stock     Paid-In     Accumulated     Comprehensive     Non-Controlling     Stockholders’  
    Shares     Amount     Shares     Amount     Capital     Deficit     Loss     Interest     Equity  
                                                       
BALANCES, January 1, 2020     132,040     $ -       3,318,390     $ 3,000     $ 101,099,000     $ (88,650,000 )   $ (5,511,000 )   $ 8,000     $ 6,949,000  
Stock based compensation:                                                                        
Options     -       -       -       -       61,000       -       -       -       61,000  
Common stock     -       -       102,500       -       182,000       -       -       -       182,000  
Issuance of common stock in payment of                                                                        
  short term advances, related party     -       -       660,667       1,000       739,000       -       -       -       740,000  
Issuance of common stock in payment of                                                                        
  accrued liabilities     -       -       153,124       -       229,000       -       -       -       229,000  
Issuance of common stock for conversion                                                                        
 of debt     -       -       7,238,729       7,000       16,704,000       -       -       -       16,711,000  
Beneficial conversion feature in connection                                                                        
 with convertible notes     -       -       -       -       82,000       -       -       -       82,000  
Fair value of warrants issued in connection                                                                        
 with convertible notes     -       -       -       -       3,173,000       -       -       -       3,173,000  
Cash for exchange fees and other financing costs     -       -       -       -       (25,000 )     -       -       -       (25,000 )
Comprehensive loss:                                                                        
Net loss     -               -       -       -       (24,641,000 )     -       -       (24,641,000 )
Preferred dividends     -       -       -       -       -       (10,000 )     -       -       (10,000 )
Net unrealized loss on derivatives                                                                        
  in related party     -       -       -       -       -       -       1,080,000       -       1,080,000  
Foreign currency translation adjustments     -       -       -       -       -       -       (8,000 )     -       (8,000 )
Other     -       -       -       -       -       (1,000 )     -       -       (1,000 ) 
                                                                         
BALANCES, September 30, 2020     132,040     $ -       11,473,410     $ 11,000     $ 122,244,000     $ (113,302,000 )   $ (4,439,000 )   $ 8,000     $ 4,522,000  

 

 

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

 

  F- 7  
 

 

AULT GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

 

                 
    For the Nine Months Ended September 30,  
    2021     2020  
             
Cash flows from operating activities:                
Net income (loss)   $ 1,439,000     $ (24,641,000 )
Less: Net loss from discontinued operations     -       (1,698,000 )
Net income (loss) from continuing operations     1,439,000       (22,943,000 )
Adjustments to reconcile net loss to net cash used in operating activities:                
Depreciation     711,000       357,000  
Amortization     296,000       252,000  
Amortization of right-of-use assets     683,000     47,000  
Amortization, related party     23,000       -  
Interest expense – debt discount     61,000       2,379,000  
(Gain) loss on extinguishment of debt     (929,000 )     2,749,000  
Change in fair value of warrant liability     (259,000 )     -  
Accretion of original issue discount on notes receivable – related party     (4,213,000 )     21,000  
Accretion of original issue discount on notes receivable     (366,000 )     (5,000 )
Increase in accrued interest on notes receivable – related party     (119,000 )     -  
Stock-based compensation     4,732,000       272,000  
Realized losses on other investments     -       28,000  
Realized gains on sale of marketable securities     (15,154,000 )     (23,000 )
Unrealized losses on marketable equity securities     6,353,000       132,000  
Unrealized gains on equity securities – related party     (6,150,000 )     (25,000 )
Unrealized (gains) losses on equity securities     (2,795,000 )     73,000  
Changes in operating assets and liabilities:                
Marketable equity securities     (34,196,000 )     -  
Accounts receivable     (1,270,000 )     (591,000 )
Accrued revenue     (166,000 )     600,000  
Inventories     (492,000 )     (199,000 )
Prepaid expenses and other current assets     (5,155,000 )     (750,000 )
Other assets     (407,000 )     (86,000 )
Accounts payable and accrued expenses     (1,073,000 )     11,986,000  
Accounts payable, related parties     (9,000 )     (26,000 )
Other current liabilities     2,210,000       408,000  
Lease liabilities     (666,000     (13,000 )
                 
Net cash used in continuing operating activities     (56,911,000 )     (5,357,000 )
Net cash provided by discontinued operating activities           1,000  
Net cash used in operating activities     (56,911,000 )     (5,356,000 )
                 
Cash flows from investing activities:                
Purchase of property and equipment     (28,145,000 )     (554,000 )
Investment in promissory notes, related parties     (4,994,000 )     (517,000 )
Investments in common stock and warrants, related parties     (19,590,000 )     (93,000 )
Investment in real property, related party     (2,670,000 )     -  
Proceeds from sale of investment in real property, related party     2,670,000       -  
Sales of marketable equity securities     430,000       144,000  
Purchase of marketable equity securities     (2,144,000 )     -  
Proceeds from loans receivable     -       140,000  
Investments in debt and equity securities     (14,287,000 )     (13,000 )
                 
Net cash used in investing activities   $ (68,730,000 )   $ (893,000 )

 

 

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

 

  F- 8  
 

 

AULT GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (continued)

 

 

    For the Nine Months Ended September 30,  
    2021     2020  
Cash flows from financing activities:                
Gross proceeds from sales of common stock   $ 160,483,000     $ -  
Financing cost in connection with sales of equity securities     (4,952,000 )     (25,000 )
Proceeds from convertible notes payable     -       100,000  
Proceeds from notes payable     724,000       7,122,000  
Proceeds from short-term advances     -       570,000  
Payments on short-term advances     -       (30,000 )
Proceeds from short-term advances – related party     -       653,000  
Payments on short-term advances – related party     -       (230,000 )
Payments on notes payable     (2,263,000 )     (289,000 )
Payments on advances on future receipts     -       (762,000 )
Payments of preferred dividends     (13,000 )     (10,000 )
Purchase of treasury stock     (2,773,000 )     -  
Payments on revolving credit facilities, net     (125,000 )     (44,000 )
                 
Net cash provided by financing activities     151,081,000       7,055,000  
                 
Effect of exchange rate changes on cash and cash equivalents     (73,000 )     (15,000 )
                 
Net increase in cash and cash equivalents     25,367,000       791,000  
                 
Cash and cash equivalents at beginning of period     18,680,000       483,000  
                 
Cash and cash equivalents at end of period   $ 44,047,000     $ 1,274,000  
                 
Supplemental disclosures of cash flow information:                
Cash paid during the period for interest   $ 712,000     $ 101,000  
                 
Non-cash investing and financing activities:                
Cancellation of convertible notes payable into shares of common stock   $ -     $ -  
Cancellation of notes payable into shares of common stock   $ 449,000     $ 16,711,000  
Payment of accounts payable with digital currency   $ 119,000     $ -  
Issuance of common stock in payment of liability   $ -     $ 229,000  
Cancellation of short-term advances, related party, into shares                
of common stock   $ -     $ 740,000  
Issuance of notes payable and convertible notes payable in                
payment of accrued expenses   $ -     $ 420,000  
Conversion of debt and equity securities to marketable securities   $ 2,656,000     $ -  
Conversion of loans to debt and equity securities   $ 150,000     $ -  
Conversion of convertible notes payable, related party, in shares                
of common stock   $ 400,000     $ -  

 

 

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

 

  F- 9  
 

 

1. DESCRIPTION OF BUSINESS

 

Ault Global Holdings, Inc., a Delaware corporation (“Ault Global” or the “Company”), formerly known as DPW Holdings, Inc., was incorporated in September 2017. Ault Global is a diversified holding company pursuing growth by acquiring undervalued businesses and disruptive technologies with a global impact. Through its wholly and majority-owned subsidiaries and strategic investments, the Company owns and operates a data center at which it mines Bitcoin, and provides mission-critical products that support a diverse range of industries, including defense/aerospace, industrial, automotive, telecommunications, medical/biopharma, and textiles. In addition, the Company extends credit to select entrepreneurial businesses through a licensed lending subsidiary. Ault Global was founded by Milton “Todd” Ault III, its Executive Chairman and is led by Mr. Ault, William B. Horne, its Chief Executive Officer and Vice Chairman and Henry Nisser, its President and General Counsel. Together, they constitute the Executive Committee, which manages the day-to-day operations of the holding company. The Company’s long-term objective is to maximize per share intrinsic value. All major investment and capital allocation decisions are made for the Company by Mr. Ault and the Executive Committee. The Company has three reportable segments:

 

· Gresham Worldwide (“GWW”) – defense solutions,

 

· TurnOnGreen – commercial electronics solutions, and

 

· Ault Alliance – Bitcoin mining, data center operations, commercial lending and media.

 

On January 19, 2021, the Company changed its corporate name from DPW Holdings, Inc., to Ault Global Holdings, Inc. The name change was effected through a parent/subsidiary short form merger pursuant to an agreement and plan of merger dated January 7, 2021. The merger and resulting name change did not affect the rights of security holders of the Company. The Company’s common stock continues to be listed on the NYSE American under the symbol “DPW”.

 

2. LIQUIDITY AND FINANCIAL CONDITION

 

As of September 30, 2021, the Company had cash and cash equivalents of $44.0 million, working capital of $93.9 million and total stockholders’ equity of $201.0 million. In the past, the Company financed its operations principally through issuances of convertible debt, promissory notes and equity securities. During the nine months ended September 30, 2021, the Company continued to strengthen its liquidity and financial condition through additional equity financing from its 2021 At-The-Market Offering (the “2021 ATM Offering”); see Note 24 for a discussion of the Company’s 2021 ATM Offering.

 

The Company believes its current cash on hand is sufficient to meet its operating and capital requirements for at least the next twelve months from the date these financial statements are issued.

 

3. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

 

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and Regulation S-X and do not include all the information and disclosures required by generally accepted accounting principles in the United States of America (“GAAP”). The Company has made estimates and judgments affecting the amounts reported in the Company’s condensed consolidated financial statements and the accompanying notes. The actual results experienced by the Company may differ materially from the Company’s estimates. The condensed consolidated financial information is unaudited but reflects all normal adjustments that are, in the opinion of management, necessary to provide a fair statement of results for the interim periods presented. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, filed with the Securities and Exchange Commission (the “SEC”) on April 15, 2021. The condensed consolidated balance sheet as of December 31, 2020 was derived from the Company’s audited 2020 financial statements contained in the above referenced Form 10-K. Results of the three and nine months ended September 30, 2021, are not necessarily indicative of the results to be expected for the full year ending December 31, 2021.

 

  F- 10  
 

 

Significant Accounting Policies

 

There have been no material changes in the Company’s significant accounting policies to those previously disclosed in the 2020 Annual Report other than disclosed below.

 

Variable Interest Entities

 

For Variable Interest Entities (“VIEs”), the Company assesses whether it is the primary beneficiary as prescribed by the accounting guidance on the consolidation of a VIE. The primary beneficiary of a VIE is the party that has the power to direct the activities that most significantly impact the performance of the entity and the obligation to absorb the losses or the right to receive the benefits that could potentially be significant to the entity.

 

The Company evaluates its business relationships with related parties to identify potential VIEs under ASC 810 “Consolidation”. The Company consolidates VIEs in which it is considered to be the primary beneficiary. Entities are considered to be the primary beneficiary if they have both of the following characteristics: (i) the power to direct the activities that, when taken together, most significantly impact the VIE’s performance, and (ii) the obligation to absorb losses and right to receive the returns from the VIE that would be significant to the VIE. The Company’s judgment with respect to its level of influence or control of an entity involves the consideration of various factors including the form of its ownership interest, its representation in the entity’s governance, the size of its investment, estimates of future cash flows, its ability to participate in policy making decisions and the rights of the other investors to participate in the decision making process and to replace the Company as manager and/or liquidate the joint venture, if applicable.

 

Treasury Stock

 

The shares of Company stock attributable to the Company’s limited partner interest in Ault Alpha LP (the “Alpha Fund”) are considered treasury stock on the consolidated balance sheet and thereby deemed not to be included in the calculation of weighted average common shares outstanding. However, these shares are legally outstanding.

 

Recently Adopted Accounting Pronouncements

 

In December 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”), which is intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. The Company has completed its evaluation process and the January 1, 2021 adoption did not have a material impact to the Company’s consolidated financial statements.

 

4. 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, 2021 and 2020. 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.

 

  F- 11  
 

 

The Company’s disaggregated revenues consist of the following for the three months ended September 30, 2021:

 

    Three Months ended September 30, 2021  
    GWW     TurnOnGreen     Ault Alliance     Total  
Primary Geographical Markets                                
North America   $ 1,415,000     $ 1,103,000     $ 608,000     $ 3,126,000  
Europe     1,848,000       (97,000 )     -       1,751,000  
Middle East     2,949,000       -       -       2,949,000  
Other     161,000       88,000       -       249,000  
Revenue from contracts with customers     6,373,000       1,094,000       608,000       8,075,000  
Revenue, lending and trading activities     -       -       (38,869,000 )     (38,869,000 )
Total revenue   $ 6,373,000     $ 1,094,000     $ (38,261,000 )   $ (30,794,000 )
                                 
Major Goods                                
RF/microwave filters   $ 630,000     $ -     $ -     $ 630,000  
Detector logarithmic video amplifiers     905,000       -       -       905,000  
Power supply units     1,256,000       1,094,000       -       2,350,000  
Power supply systems     545,000       -       -       545,000  
Healthcare diagnostic systems     97,000       -       -       97,000  
Defense systems     2,940,000       -       -       2,940,000  
Digital currency mining     -       -       272,000       272,000  
Other     -       -       336,000       336,000  
Revenue from contracts with customers     6,373,000       1,094,000       608,000       8,075,000  
Revenue, lending and trading activities     -       -       (38,869,000 )     (38,869,000 )
Total revenue   $ 6,373,000     $ 1,094,000     $ (38,261,000 )   $ (30,794,000 )
                                 
Timing of Revenue Recognition                                
Goods transferred at a point in time   $ 3,336,000     $ 1,094,000     $ 607,000     $ 5,037,000  
Services transferred over time     3,037,000       -       -       3,037,000  
Revenue from contracts with customers   $ 6,373,000     $ 1,094,000     $ 607,000     $ 8,074,000  

 

The Company’s disaggregated revenues consist of the following for the three months ended September 30, 2020:

 

    Three Months ended September 30, 2020  
    GWW     TurnOnGreen     Ault Alliance     Total  
Primary Geographical Markets                                
North America   $ 1,740,000     $ 1,136,000     $ -     $ 2,876,000  
Europe     246,000       1,000       -       247,000  
Middle East     2,233,000       -       -       2,233,000  
Other     110,000       239,000       -       349,000  
Revenue from contracts with customers     4,329,000       1,376,000       -       5,705,000  
Revenue, lending and trading activities     -       -       (29,000 )     (29,000 )
Total revenue   $ 4,329,000     $ 1,376,000     $ (29,000 )   $ 5,676,000  
                                 
Major Goods                                
RF/microwave filters   $ 1,341,000     $ -     $ -     $ 1,341,000  
Detector logarithmic video amplifiers     441,000       -       -       441,000  
Power supply units     -       1,376,000       -       1,376,000  
Power supply systems     316,000       -       -       316,000  
Healthcare diagnostic systems     262,000       -       -       262,000  
Defense systems     1,969,000       -       -       1,969,000  
Revenue from contracts with customers     4,329,000       1,376,000       -       5,705,000  
Revenue, lending and trading activities     -       -       (29,000 )     (29,000 )
Total revenue   $ 4,329,000     $ 1,376,000     $ (29,000 )   $ 5,676,000  
                                 
Timing of Revenue Recognition                                
Goods transferred at a point in time   $ 2,096,000     $ 1,376,000     $ (29,000 )   $ 3,443,000  
Services transferred over time     2,233,000       -       -       2,233,000  
Revenue from contracts with customers   $ 4,329,000     $ 1,376,000     $ (29,000 )   $ 5,676,000  

 

  F- 12  
 

 

The Company’s disaggregated revenues consisted of the following for the nine months ended September 30, 2021:

 

    Nine Months Ended September 30, 2021  
    GWW     TurnOnGreen     Ault Alliance     Total  
Primary Geographical Markets                                
North America   $ 5,444,000     $ 3,600,000     $ 1,459,000     $ 10,503,000  
Europe     5,600,000       318,000             5,918,000  
Middle East     7,845,000                   7,845,000  
Other     309,000       390,000             699,000  
Revenue from contracts with customers     19,198,000       4,308,000       1,459,000       24,965,000  
Revenue, lending and trading activities                     19,615,000       19,615,000  
Total revenue   $ 19,198,000     $ 4,308,000     $ 21,074,000     $ 44,580,000  
                         
Major Goods                        
RF/microwave filters   $ 2,921,000     $     $     $ 2,921,000  
Detector logarithmic video amplifiers     1,049,000                   1,049,000  
Power supply units     1,734,000       4,308,000             6,042,000  
Power supply systems     5,253,000                   5,253,000  
Healthcare diagnostic systems     510,000                   510,000  
Defense systems     7,731,000                   7,731,000  
Digital currency mining                     693,000       693,000  
Other                 766,000       766,000  
Revenue from contracts with customers     19,198,000       4,308,000       1,459,000       24,965,000  
Revenue, lending and trading activities                     19,615,000       19,615,000  
Total revenue   $ 19,198,000     $ 4,308,000     $ 21,074,000     $ 44,580,000  
                                 
Timing of Revenue Recognition                                
Goods transferred at a point in time   $ 10,957,000     $ 4,308,000     $ 1,459,000     $ 16,724,000  
Services transferred over time     8,241,000                   8,241,000  
Revenue from contracts with customers   $ 19,198,000     $ 4,308,000     $ 1,459,000     $ 24,965,000  

 

The Company’s disaggregated revenues consisted of the following for the nine months ended September 30, 2020:

 

    Nine Months ended September 30, 2020  
    GWW     TurnOnGreen     Ault Alliance     Total  
Primary Geographical Markets                                
North America   $ 5,110,000     $ 3,102,000     $ -     $ 8,212,000  
Europe     694,000       288,000       -       982,000  
Middle East     6,838,000       -       -       6,838,000  
Other     264,000       413,000       -       677,000  
Revenue from contracts with customers     12,906,000       3,803,000       -       16,709,000  
Revenue, lending and trading activities     -       -       (27,000 )     (27,000 )
Total revenue   $ 12,906,000     $ 3,803,000     $ (27,000 )   $ 16,682,000  
                                 
Major Goods                                
RF/microwave filters   $ 3,887,000     $ -     $ -     $ 3,887,000  
Detector logarithmic video amplifiers     1,319,000       -       -       1,319,000  
Power supply units     -       3,803,000       -       3,803,000  
Power supply systems     863,000       -       -       863,000  
Healthcare diagnostic systems     785,000       -       -       785,000  
Defense systems     6,052,000       -       -       6,052,000  
Revenue from contracts with customers     12,906,000       3,803,000       -       16,709,000  
Revenue, lending and trading activities     -       -       (27,000 )     (27,000 )
Total revenue   $ 2,906,000     $ ,803,000     $ (27,000 )   $ ,682,000  
                                 
Timing of Revenue Recognition                                
Goods transferred at a point in time   $ 6,068,000     $ 3,803,000     $ (27,000 )   $ 9,844,000  
Services transferred over time     6,838,000       -       -       6,838,000  
Revenue from contracts with customers   $ 12,906,000     $ 3,803,000     $ (27,000 )   $ 16,682,000  

 

  F- 13  
 

 

Sales of Products

 

The Company generates revenues from the sale of its products through a direct and indirect sales force. The Company’s performance obligations to deliver products are satisfied at the point in time when title transfers to the customer. Generally products are shipped FOB shipping point and title transfers to the customer at the time the products are placed on a common carrier. The Company provides standard assurance warranties, which are not separately priced, that the products function as intended. The Company primarily receives fixed consideration for sales of product. Some of the Company’s contracts with distributors include stock rotation rights after six months for slow moving inventory, which represents variable consideration. The Company uses an expected value method to estimate variable consideration and constrains revenue for estimated stock rotations until it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur. To date, returns have been insignificant. The Company’s customers generally pay within 30 days from the receipt of an invoice.

 

Because the Company’s product sales agreements have an expected duration of one year or less, the Company has elected to adopt the practical expedient in Accounting Standards Codification (“ASC”) 606-10-50-14(a) of not disclosing information about its remaining performance obligations.

 

Manufacturing Services

 

For manufacturing services, which include revenues generated by the Company’s subsidiary, Enertec Systems 2001 Ltd (“Enertec”), and in certain instances, revenues generated by the Company’s subsidiary, Gresham Power Electronics Ltd., the Company’s performance obligation for manufacturing services is satisfied over time as the Company creates or enhances an asset based on criteria that are unique to the customer and that the customer controls as the asset is created or enhanced. Generally, the Company recognizes revenue based upon proportional performance over time using a cost-to-cost method which measures progress based on the costs incurred to total expected costs in satisfying its performance obligation. This method provides a depiction of the progress in providing the manufacturing service because there is a direct relationship between the costs incurred by the Company and the transfer of the manufacturing service to the customer. Manufacturing services that are recognized based upon the proportional performance method are included in the above table as services transferred over time and to the extent the customer has not been invoiced for these revenues, as accrued revenue in the accompanying consolidated balance sheets. Revisions to the Company’s estimates may result in increases or decreases to revenues and income and are reflected in the consolidated financial statements in the periods in which they are first identified.

 

The Company has elected the practical expedient to not adjust the promised amount of consideration for the effects of a significant financing component to the extent that the period between when the Company transfers its promised good or service to the customer and when the customer pays in one year or less.

 

Lending and Trading Activities

 

Lending Activities

Ault Alliance, Inc. (“Ault Alliance”), through its wholly owned subsidiary Digital Power Lending, LLC (“DP Lending”), generates revenue from lending activities primarily through interest, origination fees and late/other fees. Interest income on these products is calculated based on the contractual interest rate and recorded as interest income as earned. The origination fees or original issue discounts are recognized over the life of the loan using the effective interest method.

 

  F- 14  
 

 

Trading Activities

Ault Alliance, through DP Lending, generates revenue from trading activities primarily through sales of securities that have appreciated since their acquisition. Financial instruments utilized in trading activities are carried at fair value. Fair value is generally based on quoted market prices for the same or similar assets and liabilities. If these market prices are not available, fair values are estimated based on dealer quotes, pricing models, discounted cash flow methodologies, or similar techniques where the determination of fair value may require significant management judgment or estimation. Realized gains and losses are recorded on a trade-date basis. Realized and unrealized gains and losses are recognized in revenue from lending and trading activities.

 

Blockchain Mining

 

The Company has executed contracts with digital asset mining pools to provide computing power to the mining pool. The contracts are terminable at any time by either party and the Company’s enforceable right to compensation only begins when the Company provides computing power to the mining pool operator. In exchange for providing computing power, the Company is entitled to a fractional share of the fixed digital currency award the mining pool operator receives (less digital asset transaction fees to the mining pool operator which are recorded as a component of cost of revenues), for successfully adding a block to the blockchain. The Company’s fractional share is based on the proportion of computing power the Company contributed to the mining pool operator to the total computing power contributed by all mining pool participants in solving the current algorithm to add a block to the blockchain.

 

Providing computing power in digital asset transaction verification services is an output of the Company’s ordinary activities. The provision of providing such computing power is the only performance obligation in the Company’s contracts with mining pool operators. The transaction consideration the Company receives, if any, is noncash consideration, which the Company measures at fair value on the date received, which is not materially different than the fair value at contract inception or the time the Company has earned the award from the pools. All consideration is variable. The Company cannot determine, during the course of solving for a block, that a reversal of revenue is not probable and therefore revenue is recognized when the mining pool operator successfully places a block (by being the first to solve an algorithm) and the Company receives confirmation of the consideration it will receive.

 

Because it is not probable that a significant reversal of cumulative revenue will not occur, the consideration is constrained until the mining pool operator successfully places a block (by being the first to solve an algorithm) and the Company receives confirmation of the consideration it will receive, at which time revenue is recognized. There is no significant financing component in these transactions.

 

Fair value of the digital currency award received is determined using the market rate of the related digital currency at the time of receipt.

 

There is currently no specific definitive guidance under GAAP or alternative accounting framework for the accounting for digital currencies recognized as revenue or held, and management has exercised significant judgment in determining the appropriate accounting treatment. In the event authoritative guidance is promulgated by the FASB, the Company may be required to change its policies, which could have an effect on the Company’s consolidated financial position and results from operations.

 

Expenses associated with running the cryptocurrency mining business, such as equipment depreciation and electricity costs are recorded as a component of cost of revenues.

 

  F- 15  
 

 

5. fair value of financial instruments

 

The categorization of a financial instrument within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The 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:

 

    Fair Value Measurement at September 30, 2021  
    Total     Level 1     Level 2     Level 3  

Investments in convertible promissory notes
of Avalanche International, Corp. (“AVLP”)
– a related party

  $

16,574,000

    $ -     $ -     $

16,574,000

 

Investment in term promissory note of Ault &
Company, Inc. (“Ault & Company”) – a
related party

    2,620,000       -       -       2,620,000  

Investments in common stock of AVLP – a
related party

    60,000       -       -       60,000  

Investment in common stock and warrants of
Alzamend Neuro, Inc. (“Alzamend”) – a
related party

    24,851,000       20,781,000       -       4,070,000  
Investments in marketable equity securities     49,931,000       49,931,000       -       -  
Investments in debt and equity securities     9,924,000       -       -       9,924,000  
Total Investments   $ 103,960,000     $ 70,712,000     $ -     $ 33,248,000  

 

    Fair Value Measurement at December 31, 2020  
    Total     Level 1     Level 2     Level 3  
Investments in convertible promissory notes
and advances of AVLP and Alzamend –
related parties
  $ 10,668,000     $     $     $ 10,668,000  
Investments in common stock and warrants of
AVLP – a related party
    5,486,000       500,000             4,986,000  
Investment in common stock and warrants of
Alzamend – a related party
    653,000                   653,000  
Investments in marketable equity securities     2,563,000       2,563,000              
Investments in debt and equity securities     262,000                   262,000  
Total Investments   $ 19,632,000     $ 3,063,000     $     $ 16,569,000  

 

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.

 

Investments

 

The Company considers all highly liquid interest-earning investments with a maturity of three months or less at the date of purchase to be cash equivalents. The fair values of these investments approximate their carrying values. In general, investments with original maturities of greater than three months and remaining maturities of less than one year are classified as short-term investments. Investments with maturities beyond one year may be classified as short-term based on their highly liquid nature and because such marketable securities represent the investment of cash that is available for current operations.

 

Debt investments are classified as available-for-sale and realized gains and losses are recorded using the specific identification method. The Company made an irrevocable election to record available-for-sale debt investments at fair value utilizing the fair value option available under GAAP. The Company believed that carrying these investments at fair value better portrayed the economic substance of the investments. Under the fair value option, gains and losses on the debt investments are included in unrealized gains/(losses) on investments within net earnings each reporting period. Fair value is calculated based on publicly available market information or other estimates determined by management. If the cost of an investment exceeds its fair value, the Company evaluates, among other factors, general market conditions, credit quality of debt instrument issuers, and the extent to which the fair value is less than cost. To determine credit losses, the Company employs a systematic methodology that considers available quantitative and qualitative evidence. In addition, the Company considers specific adverse conditions related to the financial health of, and business outlook for, the investee. If the Company has plans to sell the security or it is more likely than not that the Company will be required to sell the security before recovery, then a decline in fair value below cost is recorded as an impairment charge in other income (expense), net and a new cost basis in the investment is established. If market, industry, and/or investee conditions deteriorate, the Company may incur future impairments.

 

  F- 16  
 

 

Equity Investments

 

The following discusses the Company’s marketable equity securities, non-marketable equity securities, gains and losses on marketable and non-marketable equity securities.

 

The Company’s marketable equity securities are publicly traded stocks or funds measured at fair value and classified within Level 1 and 2 in the fair value hierarchy because the Company uses quoted prices for identical assets in active markets or inputs that are based upon quoted prices for similar instruments in active markets.

 

The Company’s non-marketable equity securities are investments in privately held companies without readily determinable market values. The carrying value of the Company’s non-marketable equity securities is adjusted to fair value upon observable transactions for identical or similar investments of the same issuer or impairment (referred to as the measurement alternative). Non-marketable equity securities that have been remeasured during the period based on observable transactions are classified within Level 2 or Level 3 in the fair value hierarchy because the Company estimates the value based on valuation methods which may include a combination of the observable transaction price at the transaction date and other unobservable inputs including volatility, rights, and obligations of the securities the Company holds. The fair value of non-marketable equity securities that have been remeasured due to impairment are classified within Level 3.

 

The Company performs a qualitative assessment on a periodic basis and recognizes an impairment if there are sufficient indicators that the fair value of the investment is less than carrying value. Changes in value are recorded in other income (expense), net.

 

Derivatives

 

Derivative instruments are recognized as either assets or liabilities and measured at fair value. The accounting for changes in the fair value of a derivative depends on the intended use of the derivative and the resulting designation.

 

For derivative instruments that are not designated as hedges, gains and losses from changes in fair values are primarily recognized in other income (expense), net.

 

  F- 17  
 

 

The following table summarizes the changes in investments in debt and equity securities measured and carried at fair value on a recurring basis with the use of significant unobservable inputs (Level 3) for the nine months ended September 30, 2021:

 

    Investments in  
    debt and equity  
    securities  
Balance at January 1, 2021   $ 262,000  
Investment in convertible promissory notes     3,850,000  
Investment in convertible preferred stock     2,850,000  
Initial valuation of acquired warrants     2,673,000  
Change in fair value of warrants     995,000  
Conversion of loans to debt and equity securities     150,000  
Unrealized gains on debt and equity securities     1,800,000  
Conversion to marketable securities     (2,656,000 )
Balance at September 30, 2021   $ 9,924,000  

 

See Note 13 for the changes in investments in AVLP, Alzamend and Ault & Company measured and carried at fair value on a recurring basis with the use of significant unobservable inputs (Level 3) during the nine months ended September 30, 2021.

 

6. Net incomE (Loss) per Share

 

Basic and diluted net income per common share for the nine months ended September 30, 2021 are calculated as follows:

 

    For the Nine Months Ended September 30, 2021  
    Income     Shares     Per-Share  
    (Numerator)     (Denominator)     Amount  
 Net income attributable to Ault Global Holdings   $ 1,346,000                  
 Less: Preferred stock dividends     (13,000 )                
                         
 Basic earnings per share                        
 Net income available to common stockholders     1,333,000       49,714,000     $ 0.03  
                         
 Effect of dilutive securities                        
 Restricted stock grants     -       431,000          
                         
 Diluted earnings per share                        
 Income available to common stockholders plus assumed conversions   $ 1,333,000       50,145,000     $ 0.03  

 

  F- 18  
 

 

Net loss per share is computed by dividing the net loss to common stockholders by the weighted average number of common shares outstanding. The calculation of the basic and diluted earnings per share is the same for all periods presented, excluding the nine months ended September 30, 2021, as the effect of the potential common stock equivalents is anti-dilutive due to the Company’s net loss position for all periods presented. Anti-dilutive securities, which are convertible into or exercisable for the Company’s common stock, consist of the following at September 30, 2021 and 2020:

 

    September 30,  
    2021     2020  
Stock options     4,761,000       1,000  
Warrants     5,936,000       3,582,000  
Convertible notes     165,000       1,396,000  
Conversion of preferred stock     2,000       2,000  
Total     10,864,000       4,981,000  

 

 

7. Discontinued Operations

 

On March 16, 2020, to try and mitigate the spread of COVID-19, San Diego County health officials issued orders mandating that all restaurants must end dine-in services. As a result of these temporary closures and the deteriorating business conditions at the Company’s restaurant businesses, the Company concluded that discontinuing the operations of I.AM, Inc. (“I.AM”) was ultimately in its best interest.

 

In the first quarter of 2020, management determined that the permanent closing of the restaurant operations met the criteria for presentation as discontinued operations. Accordingly, the results of the restaurant operations are presented as discontinued operations in the Company’s condensed consolidated statements of operations and comprehensive loss and are excluded from continuing operations for all periods presented. On November 2, 2020, I.AM filed a voluntary petition for bankruptcy under Chapter 7 in the United States Bankruptcy Court in the Central District of California, Santa Ana Division, case number 8:20-bk-13076. As a result of I.AM’s bankruptcy filing on November 2, 2020, Ault Global ceded authority for managing the business to the Bankruptcy Court. For this reason, the Company concluded that Ault Global had lost control of I.AM, and no longer had significant influence over I.AM. Therefore, the Company deconsolidated I.AM effective with the filing of the Chapter 11 bankruptcy in November 2020.

 

The restaurant operations are included in the Company’s results as discontinued operations through March 16, 2020, the date of closing of the restaurants. The following tables summarize the major classes of line items included in loss from discontinued operations:

 

    For the Nine  
    Months Ended  
    September 30, 2020  
Revenue   $ 543,000  
Cost of revenue     (160,000 )
Selling and marketing      
General and administrative     (556,000 )
Impairment of property and equipment and right-of-use assets     (1,525,000 )
Loss from discontinued operations   $ (1,698,000 )

 

 

  F- 19  
 

 

8. Marketable Equity Securities

 

Marketable securities in equity securities with readily determinable market prices consisted of the following as of September 30, 2021 and December 31, 2020:

 

    Marketable equity securities at September 30, 2021  
            Gross unrealized     Gross unrealized          
    Cost     gains     losses     Fair value  
Common shares   $ 55,233,000     $ 2,112,000     $ (7,414,000 )   $ 49,931,000  

 

 

    Marketable equity securities at December 31, 2020  
            Gross unrealized     Gross unrealized          
    Cost     gains     losses     Fair value  
Common shares   $ 1,506,000     $ 1,083,000     $ (26,000 )   $ 2,563,000  

 

Marketable Equity Securities

 

The following table presents additional information about marketable equity securities:

 

    Marketable  
    Equity Securities  
Balance at January 1, 2021   $ 2,563,000  
Purchases of marketable equity securities in operations     338,620,000  
Purchases of marketable equity securities     2,144,000  
Conversion of debt securities to marketable securities     2,656,000  
Sales of marketable equity securities in operations     (303,923,000 )
Sales of marketable equity securities     (430,000 )
Realized gains on marketable equity securities     19,040,000  
Realized losses on marketable equity securities     (4,386,000 )
Unrealized gains on marketable equity securities     (6,353,000 )
Balance at September 30, 2021   $ 49,931,000  

 

At September 30, 2021 and December 31, 2020, the Company had invested in the marketable equity securities of certain publicly traded companies. The Company’s investment in marketable equity securities will be revalued on each balance sheet date.

 

At September 30, 2021 and December 31, 2020, the Company also held an investment in a limited partnership. This investment does not have a readily determinable fair value and has been measured at cost less impairment, if any, and adjusted for observable price changes for identical or similar investments.

 

Naked Brand Group Stock Purchase Agreement

 

On March 29, 2021, DP Lending entered into a stock purchase agreement with an institutional investor (the “Seller”) to purchase 47,058,824 shares of Naked Brand Group Limited (the “NAKD shares”). Under the agreement, DP Lending agreed to sell the NAKD shares and pay the Seller 99% of the net proceeds from the sale. In April 2021, DP Lending sold 47,058,824 shares of Naked Brand Group Limited for gross proceeds of $29.3 million. DP Lending remitted 99% of the proceeds to the institutional investor and retained 1%, or $293,000, which was recorded as revenue in April 2021.

 

  F- 20  
 

 

9. LOANS RECEIVABLE 

 

Loans receivable are summarized as follows:

 

    September 30, 2021           December 31, 2020
 Loans receivable before allowances and discounts   $ 9,114,000             $2,032,000
 Allowances for uncollectible loans     (1,281,000 )           (1,281,000)
 Unamortized discounts     (1,956,000 )           (1,000)
Loans receivable   $ 5,877,000             $750,000

 

DP Lending provides commercial loans to companies throughout the United States to provide them with operating capital to finance the growth of their businesses. 

 

Activity related to loans receivable for the nine months ended September 30, 2021 is summarized as follows:

 

    Loans Receivable  
 Balance at January 1, 2021   $ 750,000  
 Investment in convertible promissory notes     4,923,000  
 Accretion of discount     366,000  
 Foreign currency loss     (8,000 )
 Conversion to marketable securities     (154,000 )
 Balance at September 30, 2021   $ 5,877,000  

 

 

10. PROPERTY AND EQUIPMENT, NET

 

During the quarter ended September 30, 2021, the Company executed contracts to purchase 4,000 Antminer S-19 Pro Bitcoin miners. As of September 30, 2021, the Company had received 1,000 of the Bitcoin miners. The remaining 3,000 units are expected to be delivered at a rate of 300 units per month between October 2021 and July 2022. The gross purchase price is $27.3 million, of which $18.1 million was paid as of September 30, 2021 with the balance scheduled to be paid between October 2021 and June 2022. During the quarter ended September 30, 2021, the Company capitalized $433,000 of shipping costs and $1.2 million of third-party commissions related to cryptocurrency machines and related equipment.

 

At September 30, 2021 and December 31, 2020, property and equipment consisted of:

 

    September 30, 2021     December 31, 2020  
Cryptocurrency machines and related equipment   $ 20,362,000     $ 567,000  
Computer, software and related equipment     4,364,000       3,057,000  
Office furniture and equipment     702,000       490,000  
Land     2,567,000        
Building     1,439,000        
Leasehold improvements     4,229,000       1,352,000  
      33,663,000       5,466,000  
Accumulated depreciation and amortization     (4,113,000 )     (3,343,000 )
Property and equipment, net   $ 29,550,000     $ 2,123,000  

 

For the nine months ended September 30, 2021 and 2020, depreciation expense amounted to $711,000 and $357,000, respectively.

 

  F- 21  
 

 

Acquisition of Michigan Cloud Data Center

 

On January 29, 2021, Alliance Cloud Services, LLC, a majority-owned subsidiary of Ault Alliance, closed on the acquisition of a 617,000 square foot energy-efficient facility located on a 34.5 acre site in southern Michigan for a purchase price of $3.9 million. The facility is subject to a final corrective measures plan with the Environment Protection Agency. The seller performed remedial activities at the Michigan facility relating to historical soil and groundwater contamination and the Company is responsible for ongoing monitoring and final remediation plans. The Company’s estimated cost of the environmental remediation obligation is approximately $369,000 and reflects its best estimate of probable future costs for remediation based on the current assessment data and regulatory obligations. Future costs will depend on many factors, including the extent of work necessary to implement monitoring and final remediation plans and the Company’s time frame for remediation. The Company may incur actual costs in the future that are materially different than this estimate and such costs could have a material impact on results of operations, financial condition, and cash flows during the period in which they are recorded.

 

11. INTANGIBLE ASSETS, NET

 

At September 30, 2021 and December 31, 2020 intangible assets consisted of:

 

    Useful Life   September 30, 2021     December 31, 2020  
Trade name and trademark   Indefinite life   $ 1,544,000     $ 1,551,000  
Customer list   10-14 years     3,421,000       3,441,000  
Domain name and other intangible assets   5 years     688,000       690,000  
          5,653,000       5,682,000  
Accumulated depreciation and amortization         (1,584,000 )     (1,292,000 )
Intangible assets, net       $ 4,069,000     $ 4,390,000  

 

The Company’s trade names and trademarks were determined to have an indefinite life. The remaining definite lived intangible assets are primarily being amortized on a straight-line basis over their estimated useful lives. Amortization expense was $296,000 and $252,000, respectively, for the nine months ended September 30, 2021 and 2020.

 

12. GOODWILL

 

The following table summarizes the changes in the Company’s goodwill during the nine months ended September 30, 2021:

 

    Goodwill  
Balance as of January 1, 2021   $ 9,646,000  
Effect of exchange rate changes     (40,000 )
Balance as of September 30, 2021   $ 9,606,000  

 

 

13. INVESTMENTS – RELATED PARTIES

 

Investments in AVLP, Alzamend and Ault & Company at September 30, 2021 and December 31, 2020, are comprised of the following:

 

Investment in Promissory Notes, Related Parties

 

    Interest   Due     September 30,     December 31,  
    Rate   Date     2021     2020  
Investment in convertible promissory note of AVLP   12%   December 31, 2023     $ 16,549,000     $ 11,269,000  
Short-term advance in Alzamend               -       750,000  
Investment in convertible promissory note of Alzamend               -       50,000  
Investment in promissory note of Ault & Company   8%   February 25, 2022       2,500,000       -  
Accrued interest receivable, AVLP               2,025,000       2,025,000  

Accrued interest receivable, Ault & Company and Alzamend

              120,000       2,000  
Total investment in promissory notes, related parties – gross               21,194,000       14,096,000  
Less: original issue discount               -       (4,000 )
Less: provision for loan losses, AVLP               (2,000,000 )     (3,424,000 )
Total investment in promissory notes, related parties             $ 19,194,000     $ 10,668,000  

 

  F- 22  
 

 

Investment in Common Stock and Warrants, Related Parties

 

    Weighted Avg.            
    Remaining   September 30,     December 31,  
    Contractual Term   2021     2020  
Investment in warrants of AVLP   2.9 years   $ -     $ 4,986,000  
Investment in common stock of AVLP         60,000       500,000  
Investment in warrants of Alzamend   4.7 years     4,070,000       11,000  
Investment in common stock of Alzamend         20,781,000       642,000  
Total investment in common stock and warrants, related parties       $ 24,911,000     $ 6,139,000  

 

The following table summarizes the changes in the Company’s investments in AVLP, Alzamend and Ault & Company during the nine months ended September 30, 2021:

 

          Investment in        
    Investment in     promissory notes     Total  
    warrants and     and advances     investment in  
    common stock     of AVLP,     AVLP, Alzamend  
    of AVLP and     Alzamend and     and Ault &  
    Alzamend     Ault & Company     Company, net  
Balance at January 1, 2021   $ 6,139,000     $ 10,668,000     $ 16,807,000  
Investment in convertible promissory notes of AVLP           2,494,000       2,494,000  
Investment in convertible promissory note of Alzamend           (50,000 )     (50,000 )
Investment in promissory note of Ault & Company           2,500,000       2,500,000  
Investment in common stock of AVLP and Alzamend     16,118,000             16,118,000  
Investment in warrants of Alzamend     1,490,000             1,490,000  
Short-term advance in Alzamend           (750,000 )     (750,000 )
Fair value of warrants issued by AVLP     2,786,000             2,786,000  
Unrealized loss in warrants of AVLP     (7,772,000 )           (7,772,000 )
Unrealized gain in warrants of Alzamend     2,568,000             2,568,000  
Unrealized gain in common stock of AVLP and Alzamend     3,582,000             3,582,000  
Accretion of discount           4,213,000       4,213,000  
Accrued interest           119,000       119,000  
Balance at September 30, 2021   $ 24,911,000     $ 19,194,000     $ 44,105,000  

 

Investments in AVLP

 

The Company’s investments in AVLP, a related party controlled by Philou Ventures, LLC (“Philou”), an affiliate of the Company, consist of convertible promissory notes, warrants and shares of AVLP common stock. As of September 30, 2021, loans to AVLP totaled $16.5 million and, in addition to the 12% convertible promissory notes, AVLP has issued to the Company warrants to purchase 33.1 million shares of AVLP common stock at an exercise price of $0.50 per share and an initial contractual term of five years.

 

During the nine months ended September 30, 2021, the Company recorded an unrealized loss of $7.7 million due to the decline in value of the warrant derivative securities that the Company received as a result of its investment in AVLP. The unrealized loss was recorded in accumulated other comprehensive loss in the stockholder’s equity section of the Company’s consolidated balance sheet. The Company’s investment in AVLP will be revalued on each balance sheet date.

 

Fair Value Assessment of Convertible Notes - AVLP

 

During the nine months ended September 30, 2021 and 2020, no interest income was recognized from the Company’s investment in convertible promissory notes in AVLP. The Company evaluated the collectability of both interest and principal for the convertible promissory notes in AVLP to determine whether there was an impairment. At September 30, 2021, the Company determined that the fair value of the convertible promissory notes in AVLP was $16.6 million. The Company’s determination of fair value requires significant judgments and are based on significant assumptions related to the borrower’s credit risk, financial performance, expected sales, and estimated fair value of the collateral.

 

  F- 23  
 

 

Fair Value Assessment of Common Stock – AVLP

 

In aggregate, the Company has 999,175 shares of AVLP common stock which represents 18.0% of AVLP’s outstanding shares of common stock.

 

As a result of new rules implemented by the SEC, which became effective September 28, 2021, shares of AVLP were no longer eligible for quotation on the “Pink – No Information” tier operated by the OTC Markets Group, Inc. Under the new rules, companies like AVLP are required to have current financial information publicly available for brokers to publish competing quotes and provide continuous market making. As AVLP does not have financial information publicly available, AVLP was removed from the Pink Market, which resulted in almost a complete loss of liquidity for shares of AVLP common stock.

 

Shares of AVLP are available only through the “Expert Market” tier operated by the OTC Markets Group, in which quotes are “unsolicited only.” That means broker-dealers can publish unsolicited quotes representing limit orders from customers who are not affiliates or insiders of the issuer. However, many broker-dealers will not effectuate trades in securities that are not eligible for competing quotes, such as those on the Expert Market tier. Quotations in Expert Market tier securities are only made available to broker-dealers, institutions and other sophisticated investors. Securities that are on Expert Market tier do not have trading bid and ask prices and share trading volumes publicly quoted. As a result, any transactions would be unknown to the public marketplace and would not provide stockholders with a reliable market value for their shares.

 

At September 30, 2021, the Company estimated the fair value of AVLP’s common stock was $0.06 per share, a decrease from $0.50 at December 31, 2020. Based upon the estimated fair value of AVLP common stock at September 30, 2021, the Company’s investment in AVLP common stock had an unrealized loss of $688,000.

 

Variable Interest Entity Considerations - AVLP

 

The Company has determined that AVLP is a VIE as it does not have sufficient equity at risk. The Company does not consolidate AVLP because the Company is not the primary beneficiary and does not have a controlling financial interest. To be a primary beneficiary, an entity must have the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance, among other factors. Although the Company has made a significant investment in AVLP, the Company has determined that Philou, which controls AVLP through the voting power conferred by its equity investment and which is deemed to be more closely associated with AVLP, is the primary beneficiary. As a result, AVLP’s financial position and results of operations are not consolidated in the Company’s financial position and results of operations.

 

Extension of AVLP Loan Agreement

 

On April 13, 2021, the AVLP Loan Agreement was increased to up to $15 million and extended to December 31, 2023. On June 4, 2021, the AVLP Loan Agreement was increased to up to $20 million.

 

  F- 24  
 

 

Investments in Alzamend Common Stock and Warrants