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UNITED STATES

 

SECURITIES AND EXCHANGE COMMISSION

 

Washington, D.C. 20549

____________________________________________________________

 

FORM 8-K

 

CURRENT REPORT

 

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

___________________________________________________________________

 

Date of Report (Date of earliest event reported):  November 19, 2021

 

AULT GLOBAL HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

 

Delaware   001-12711   94-1721931
(State or other jurisdiction of
incorporation or organization)
  (Commission File Number)   (I.R.S. Employer Identification No.)

 

11411 Southern Highlands Parkway, Suite 240, Las Vegas, NV 89141

(Address of principal executive offices) (Zip Code)

 

(949) 444-5464

(Registrant's telephone number, including area code)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

o     Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o     Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o     Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o     Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

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

 

Title of each class  

Trading

Symbol(s)

  Name of each exchange on which registered
Common Stock, $0.001 par value   DPW   NYSE American

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company o

 

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. o

 

 

   
 

 

ITEM 2.02RESULTS OF OPERATIONS AND FINANCIAL CONDITION

 

On November 19, 2021, Ault Global Holdings, Inc. (the “Company”) issued a press release announcing its financial results for the three and nine months ended September 30, 2021. A copy of the press release is furnished herewith as Exhibit 99.1 and is incorporated by reference herein.

 

In accordance with General Instruction B.2 of Form 8-K, the information under this item and Exhibit 99.1 shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such a filing. 

 

The Securities and Exchange Commission encourages registrants to disclose forward-looking information so that investors can better understand the future prospects of a registrant and make informed investment decisions. This Current Report on Form 8-K and exhibits may contain these types of statements, which are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, and which involve risks, uncertainties and reflect the Registrant’s judgment as of the date of this Current Report on Form 8-K. Forward-looking statements may relate to, among other things, operating results and are indicated by words or phrases such as “expects,” “should,” “will,” and similar words or phrases. These statements are subject to inherent uncertainties and risks that could cause actual results to differ materially from those anticipated at the date of this Current Report on Form 8-K. Investors are cautioned not to rely unduly on forward-looking statements when evaluating the information presented within.

 

ITEM 9.01FINANCIAL STATEMENTS AND EXHIBITS

 

(d)Exhibits:

 

Exhibit

No.

  Description
     
99.1   Press Release issued on November 19, 2021.
101    Pursuant to Rule 406 of Regulation S-T, the cover page is formatted in Inline XBRL (Inline eXtensible Business Reporting Language).
104    Cover Page Interactive Data File (embedded within the Inline XBRL document and included in Exhibit 101).

 

-2-
 

 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. 

 

  AULT GLOBAL HOLDINGS, INC.
     
     
Dated: November 19, 2021 /s/ Henry Nisser  
 

Henry Nisser

President and General Counsel

 

 

-3-

 

 

 

 

 

Exhibit 99.1

 

 

Ault Global Holdings Reports Third Quarter 2021 Results

 

Las Vegas, NV, November 19, 2021 – Ault Global Holdings, Inc. (NYSE American: DPW) a diversified holding company (the “Company”), today announced its financial results for the three and nine months ended September 30, 2021.

 

Nine months ended September 30, 2021 highlights:

 

·Revenue of $44.6 million, an increase of 167% from $16.7 million in the prior nine-month period;

 

·Revenue from lending and trading activities of $19.6 million due to the allocation of capital to DP Lending;

 

·Revenues from our trading activities during the nine months ended September 30, 2021 included significant net gains on equity securities, including unrealized gains and losses from market price changes. These gains and losses have caused, and will continue to cause, significant volatility in our periodic earnings.

 

·Revenue from lending and trading activities includes an approximate $6.4 million unrealized gain from the Company’s investment in Alzamend Neuro, Inc. (Nasdaq: ALZN) (“Alzamend”), an early clinical-stage biopharmaceutical company focused on developing novel products for the treatment of neurodegenerative diseases and psychiatric disorders;

 

·Revenue from cryptocurrency mining of $693,000 as the Company resumed cryptocurrency mining operations during March 2021; and

 

·Net income of $1.3 million compared to a net loss of $24.7 million in the prior nine-month period.

 

 

Three months ended September 30, 2021 highlights:

 

·Revenue decreased $36.5 million to negative $30.8 million from positive revenue of $5.7 million in the prior third fiscal quarter;

 

·Revenue from lending and trading activities includes unrealized gains and losses and, due to stock price volatility, can result in the Company reporting negative revenue. For the three months ended September 30, 2021, the Company reported negative revenue from lending and trading activities of $(38.9) million, including a $(33.4) million unrealized loss from the Company’s investment in Alzamend;

 

·Revenue from cryptocurrency mining of $272,000 as the Company resumed cryptocurrency mining operations during March 2021;

 

·Net loss of $42.9 million for the quarter;

 

·Positive working capital of $93.9 million;

 

·Total assets of $225.7 million; and

 

·Cash of $44.0 million, marketable securities of $49.9 million and other investments of $62.6 million as of September 30, 2021.

 

   
 

 

 

 

Revenues

 

Revenues by segment for the three months ended September 30, 2021 and 2020 were as follows:

 

   For the Three Months Ended
September 30,
   Increase     
   2021   2020   (Decrease)   % 
                 
Gresham Worldwide  $6,373,000   $4,329,000   $2,044,000    47%
TurnOnGreen   1,094,000    1,376,000    (282,000)   -20%
Ault Alliance:                    
Revenue, cryptocurrency mining   238,000    -    238,000     
Revenue, lending and trading activities   (38,868,000)   (29,000)   (38,839,000)   133,928%
Other   369,000        369,000     
Total revenue  $(30,794,000)  $5,676,000   $(36,470,000)   -643%

 

 

Gresham Worldwide (“GWW”)

 

GWW revenues increased by $2.0 million, or 47%, to $6.4 million for the three months ended September 30, 2021, from $4.3 million for the three months ended September 30, 2020. GWW revenue in 2021 includes $1.8 million from Relec, which was acquired on November 30, 2020. In the prior year period, revenue was constrained by working capital issues. The increase in revenue from our GWW segment for customized solutions for the military markets reflects the benefit of our improved liquidity in 2021, as we were able to allocate additional funds to our defense business to improve their ability to fulfill backlog.

 

TurnOnGreen

 

TurnOnGreen revenues decreased by $282,000 or 20%, to $1.1 million for the three months ended September 30, 2021, from $1.4 million for three months ended September 30, 2020. The decrease is primarily attributable to supply chain disruptions during the quarter.

 

Ault Alliance

 

Revenues from our cryptocurrency mining operations were $238,000 for the three months ended September 30, 2021, compared to nil for the three months ended September 30, 2020, as we resumed our cryptocurrency mining operations during the first quarter of 2021. Our decision to resume cryptocurrency mining operations in 2021 was based on several factors, which had positively affected the number of active miners we operated, including the market prices of digital currencies, and favorable power costs available at our Michigan data center.

 

Revenues from our lending and trading activities decreased to a loss position of $(38.9) million for the three months ended September 30, 2021, from negative revenues of $(29,000) for the three months ended September 30, 2020. Revenues from our trading activities during the three months ended September 30, 2021 included significant unrealized losses from market price changes of Alzamend’s common stock. Unrealized gain and losses have caused, and will continue to cause, significant volatility in our periodic earnings.

 

At September 30, 2021, the fair value of Alzamend’s common stock was $3.08, the shares’ closing price that day. Based upon the fair value of Alzamend common stock at September 30, 2021, during the three months ended September 30, 2021, we recorded an unrealized loss of $27.4 million related to our investment in Alzamend common stock. During the three months ended September 30, 2021, we recorded an unrealized loss on our investment in warrants of Alzamend of $6.0 million. Our investment in Alzamend will be revalued on each balance sheet date.

 

Gross margins

 

Gross margins were negative $36.0 million or 117.1% for the three months ended September 30, 2021 compared to 35.3% for the three months ended September 30, 2020. Our gross margins have typically ranged between 33% and 37%, with slight variations depending on the overall composition of our revenue.

 

   
 

 

 

 

Our gross margins during the three months ended September 30, 2021, were impacted by the unfavorable margins from our lending and trading activities. Excluding the effects of margin from our lending and trading activities, our adjusted gross margins for the three months ended September 30, 2021, would have been 34.7%, consistent with our historical range.

 

Operating expenses

 

Operating expenses increased to $13.8 million for the three months ended September 30, 2021, representing an increase of $10.2 million compared to $3.6 million for the three months ended September 30, 2020.

 

The increase in operating expenses from the three months ended September 30, 2020 is attributable to the following:

 

·Research and development expenses increased by $55,000 to $524,000 for the three months ended September 30, 2021, from $469,000 for the three months ended September 30, 2020. The increase in research and development expenses is due to costs incurred at GWW related to the development of products for defense applications.

 

·Selling and marketing expenses were $2.0 million for the three months ended September 30, 2021, compared to $260,000 for the three months ended September 30, 2020, an increase of $1.7 million, or 667%. The increase was the result of greater personnel costs directly attributed to an increase in sales and marketing personnel and consultants primarily at Ault Alliance related to digital marketing and digital learning. The increase is also attributable to costs incurred at TurnOnGreen to grow our selling and marketing infrastructure related to our electric vehicle charger products.

 

·General and administrative expenses were $11.3 million for the three months ended September 30, 2021, compared to $2.8 million for the three months ended September 30, 2020, an increase of $8.5 million or 298%. General and administrative expenses increased from the comparative prior period, mainly due to:

 

onon-cash stock compensation costs of $4.1 million;

 

othe accrual of an $859,000 performance bonus related to realized gains on trading activities during the period;

 

ogeneral and administrative costs of $385,000 from Relec, which was acquired on November 30, 2020;

 

oincreased costs related to our Michigan data center, operated by Alliance Cloud Services; and

 

ohigher consulting, audit, legal and insurance costs.

 

The Company’s Chief Financial Officer, Kenneth S. Cragun, said, “The financial results for the third quarter of 2021 reflected significant unrealized losses from market price changes of our investments. At the end of each quarter, we value our investments in certain companies based on the trading price of their stock, which has resulted in significant volatility in both revenue and operating results over the last two quarters. On a year-to-date basis, however, we did see significant revenue growth and improved operating results, with revenue up 167% over the prior year period and net income of $1.3 million compared to a net loss of $24.7 million for the nine months ended September 30, 2020. During the third quarter of 2021, we were able to make significant investments in our BitNile subsidiary and ended the quarter with $20.4 million in Bitcoin mining equipment, which will contribute to both revenue growth and improved profitability in future periods.”

 

The Company’s Founder and Executive Chairman, Milton “Todd” Ault, III said, “In spite of the volatility of our quarterly financial results, we believe the future prospects for the Company are extremely promising. Quite simply, we are in a strong financial position, and we are investing for the future. We have grown assets to $225.7 million and have announced key investments in our Michigan data center and Bitcoin mining equipment. We would like to acknowledge our GWW defense team as during the third quarter of 2021 they grew revenues by 47% compared to the prior third fiscal quarter. As a holding company, we have made investments in the sectors of Bitcoin mining, data center operations, defense, electric vehicle chargers, power electronic businesses, lending and investment platform, and we continue to believe the road ahead is bright.”

 

Reminder - Company to hold special stockholder conference call and webcast for major corporate announcement

 

As previously announced, on Monday, November 22, 2021 at 6:00 a.m. Pacific time, the Company’s Executive Chairman, Milton “Todd” Ault, III and its CEO, William Horne will be hosting a conference call and webcast to discuss a major corporate announcement along with the financial performance and outlook of the Company and its subsidiaries. Joining Mr. Ault and Mr. Horne will be Kenneth Cragun, the Company’s CFO. The Company encourages all stockholders to attend this meeting, if possible.

 

   
 

 

 

 

Stockholders, investors and interested parties who desire to participate in the webcast must use the following link to register prior to 6:00 a.m. Pacific time on November 22, 2021:

 

https://zoom.us/webinar/register/WN_a3zZ_BmyRrK4fBqAc6-hvg

 

For more information on Ault Global Holdings and its subsidiaries, the Company recommends that stockholders, investors and any other interested parties read the Company’s public filings and press releases available under the Investor Relations section at www.AultGlobal.com or available at www.sec.gov. 

 

About Ault Global Holdings, Inc.

 

Ault Global Holdings, Inc. 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 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 Holding’s headquarters are located at 11411 Southern Highlands Parkway, Suite 240, Las Vegas, NV 89141; www.AultGlobal.com.

 

Forward-Looking Statements

 

This press release contains “forward looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements generally include statements that are predictive in nature and depend upon or refer to future events or conditions, and include words such as “believes,” “plans,” “anticipates,” “projects,” “estimates,” “expects,” “intends,” “strategy,” “future,” “opportunity,” “may,” “will,” “should,” “could,” “potential,” or similar expressions. Statements that are not historical facts are forward-looking statements. Forward-looking statements are based on current beliefs and assumptions that are subject to risks and uncertainties. Forward-looking statements speak only as of the date they are made, and the Company undertakes no obligation to update any of them publicly in light of new information or future events. Actual results could differ materially from those contained in any forward-looking statement as a result of various factors. More information, including potential risk factors, that could affect the Company’s business and financial results are included in the Company’s filings with the U.S. Securities and Exchange Commission, including, but not limited to, the Company’s Forms 10-K, 10-Q and 8-K. All filings are available at www.sec.gov and on the Company’s website at www.AultGlobal.com.

 

Contacts:

IR@AultGlobal.com or 1-888-753-2235

 

   
 

 

 

 

AULT GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

 

   September 30,   December 31, 
   2021   2020 
ASSETS          
           
CURRENT ASSETS          
Cash and cash equivalents  $105,391,000   $18,680,000 
Marketable equity securities   30,172,000    2,563,000 
Accounts receivable   4,730,000    3,852,000 
Accounts and other receivable, related party   1,196,000    1,196,000 
Accrued revenue   1,594,000    1,696,000 
Inventories   2,900,000    3,374,000 
Prepaid expenses and other current assets   5,373,000    2,988,000 
TOTAL CURRENT ASSETS   151,356,000    34,349,000 
           
Intangible assets, net   4,175,000    4,390,000 
Goodwill   9,589,000    9,646,000 
Property and equipment, net   7,262,000    2,123,000 
Right-of-use assets   4,605,000    4,318,000 
Investment in promissory notes, related parties   13,913,000    10,668,000 
Investments in common stock and warrants, related parties   60,355,000    6,139,000 
Investments in debt and equity securities   4,013,000    262,000 
Investment in limited partnership   1,869,000    1,869,000 
Loans receivable   572,000    750,000 
Other investments, related parties   788,000    803,000 
Other assets   604,000    326,000 
TOTAL ASSETS  $259,101,000   $75,643,000 
           
LIABILITIES AND STOCKHOLDERS’ EQUITY          
           
CURRENT LIABILITIES          
Accounts payable and accrued expenses  $7,784,000   $10,579,000 
Accounts payable and accrued expenses, related party       36,000 
Operating lease liability, current   876,000    524,000 
Revolving credit facility   103,000    125,000 
Notes payable, net   1,808,000    4,048,000 
Notes payable, related parties       188,000 
Convertible notes payable, related party       400,000 
Warrant liability   4,580,000    4,192,000 
Income taxes payable   2,770,000     
Other current liabilities   5,572,000    1,790,000 
TOTAL CURRENT LIABILITIES  $23,493,000   $21,882,000 

 

   
 

 

 

 

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   3,792,000    3,855,000 
Notes payable       336,000 
Notes payable, related parties       52,000 
Convertible notes payable   427,000    386,000 
           
TOTAL LIABILITIES   27,712,000    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,        
   $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;   56,000    28,000 
56,159,963 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   311,760,000    171,397,000 
Accumulated deficit   (77,190,000)   (121,397,000)
Accumulated other comprehensive gain (loss)   (4,601,000)   (1,718,000)
TOTAL AULT GLOBAL HOLDINGS STOCKHOLDERS’ EQUITY   230,025,000    48,310,000 
           
Non-controlling interest   1,364,000    822,000 
           
TOTAL STOCKHOLDERS’ EQUITY   231,389,000    49,132,000 
           
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY  $259,101,000   $75,643,000 

 

   
 

 

 

 

AULT GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (LOSS) (Unaudited)

 

   For the Three Months Ended   For the Nine Months Ended 
   September 30,   September 30, 
   2021   2020   2021   2020 
Revenue  $8,564,000   $5,435,000   $16,469,000   $11,004,000 
Revenue, cryptocurrency mining   291,000        421,000     
Revenue, lending and trading activities   53,274,000    (34,000)   58,485,000    2,000 
Total revenue   62,129,000    5,401,000    75,375,000    11,006,000 
Cost of revenue   6,278,000    3,496,000    11,386,000    7,349,000 
Gross profit   55,851,000    1,905,000    63,989,000    3,657,000 
                     
Operating expenses                    
Research and development   531,000    462,000    1,133,000    903,000 
Selling and marketing   1,505,000    295,000    2,747,000    633,000 
General and administrative   7,992,000    2,918,000    13,084,000    5,821,000 
Provision for credit losses       (1,000,000)        
Total operating expenses   10,028,000    2,675,000    16,964,000    7,357,000 
Income (loss) from continuing operations   45,823,000    (770,000)   47,025,000    (3,700,000)
Other income (expenses)                    
Interest income   14,000    36,000    51,000    36,000 
Interest expense   (22,000)   (963,000)   (337,000)   (2,049,000)
Change in fair value of marketable equity securities   (1,915,000)   337,000    45,000    (29,000)
Realized gain on marketable securities           397,000     
Gain (loss) on extinguishment of debt   447,000    (12,000)   929,000    (475,000)
Change in fair value of warrant liability   290,000    (10,000)   (388,000)   (6,000)
Total other income (expenses), net   (1,186,000)   (612,000)   697,000    (2,523,000)
Income (loss) from continuing operations before income taxes   44,637,000    (1,382,000)   47,722,000    (6,223,000)
Income tax (expense) benefit   (3,504,000)   6,000    (3,510,000)   12,000 
Net income (loss) from continuing operations   41,133,000    (1,376,000)   44,212,000    (6,211,000)
Net loss from discontinued operations, net of taxes               (1,698,000)
Net income (loss)   41,133,000    (1,376,000)   44,212,000    (7,909,000)
Net loss attributable to non-controlling interest   1,083,000        3,000     
Net income (loss) attributable to Ault Global Holdings   42,216,000    (1,376,000)   44,215,000    (7,909,000)
Preferred dividends   (4,000)   (3,000)   (9,000)   (7,000)
Net income (loss) available to common stockholders  $42,212,000   $(1,379,000)  $44,206,000   $(7,916,000)
                     
Basic net income (loss) per common share:                    
Continuing operations  $0.82   $(0.24)  $0.97   $(1.20)
Discontinued operations               (0.33)
Net income (loss) per common share  $0.82   $(0.24)  $0.97   $(1.52)
                     
Diluted net income (loss) per common share:                    
Continuing operations  $0.79   $(0.24)  $0.91   $(1.20)
Discontinued operations               (0.33)
Net income (loss) per common share  $0.79   $(0.24)  $0.91   $(1.52)
Weighted average basic common shares outstanding   50,783,000    5,864,000    45,052,000    5,199,000 
Weighted average diluted common shares outstanding   52,780,000    5,864,000    47,574,000    5,199,000 
                     
Comprehensive income (loss)                    
Net income (loss) available to common stockholders  $42,212,000   $(1,379,000)  $44,206,000   $(7,916,000)
Other comprehensive income (loss)                    
Foreign currency translation adjustment   134,000    97,000    41,000    (51,000)
Net unrealized gain (loss) on derivative securities of related party   (5,893,000)   761,000    (2,924,000)   (481,000)
Other comprehensive income (loss)   (5,759,000)   858,000    (2,883,000)   (532,000)
Total comprehensive income (loss)  $36,453,000   $(521,000)  $41,323,000   $(8,448,000)

 

   
 

 

 

 

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)  $44,212,000   $(7,909,000)
Less: Net loss from discontinued operations       (1,698,000)
Net income (loss) from continuing operations   44,212,000    (6,211,000)
Adjustments to reconcile net income (loss) to net cash used in operating activities:          
Depreciation   446,000    260,000 
Amortization   191,000    167,000 
Amortization of right-of-use assets   441,000    247,000 
Amortization, related party   15,000     
Interest expense – debt discount   40,000    908,000 
Gain on extinguishment of debt   (929,000)    
Change in fair value of warrant liability   (290,000)   10,000 
Accretion of original issue discount on notes receivable – related party   (4,000)   15,000 
Accretion of original issue discount on notes receivable   (955,000)   (4,000)
Increase in accrued interest on notes receivable – related party   (1,000)    
Stock-based compensation   584,000    143,000 
Realized losses on other investments       28,000 
Realized gains on sale of marketable securities   (12,283,000)   (15,000)
Unrealized gains on marketable equity securities   (3,483,000)   (52,000)
Unrealized (gains) losses on equity securities – related party   (39,852,000)   65,000 
Unrealized (gains) losses on equity securities   (1,224,000)   73,000 
Changes in operating assets and liabilities:          
Marketable equity securities   (9,616,000)    
Accounts receivable   (887,000)   199,000 
Accrued revenue   78,000    34,000 
Inventories   485,000    (35,000)
Prepaid expenses and other current assets   (2,537,000)   181,000 
Other assets   (246,000)   (39,000)
Accounts payable and accrued expenses   (2,651,000)   1,365,000 
Accounts payable, related parties   (36,000)   (24,000)
Income taxes payable   2,770,000      
Other current liabilities   4,472,000    660,000 
Lease liabilities   (439,000)   (234,000)
Net cash used in continuing operating activities   (21,699,000)   (2,259,000)
Net cash provided by discontinued operating activities       1,000 
Net cash used in operating activities   (21,699,000)   (2,258,000)
           
Cash flows from investing activities:          
Purchase of property and equipment   (5,590,000)   (190,000)
Investment in promissory notes, related parties   (4,040,000)   (199,000)
Investments in common stock and warrants, related parties   (16,483,000)   (10,000)
Investment in real property, related party   (2,670,000)    
Proceeds from sale of investment in real property, related party   2,670,000     
Purchase of marketable equity securities        
Sales of marketable equity securities   430,000    110,000 
Proceeds from loans receivable       140,000 
Investments in debt and equity securities   (4,054,000)   (3,000)
Net cash used in investing activities  $(29,737,000)  $(152,000)

 

   
 

 

 

 

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  $144,044,000   $ 
Financing cost in connection with sales of equity securities   (4,541,000)    
Proceeds from convertible notes payable       100,000 
Proceeds from notes payable   500,000    3,148,000 
Proceeds from short-term advances – related party       604,000 
Payments on short-term advances – related party       (98,000)
Payments on notes payable   (1,917,000)   (186,000)
Payments on advances on future receipts   -    (20,000)
Payments of preferred dividends   (9,000)   (7,000)
Payments on revolving credit facilities, net   (23,000)   68,000 
           
Net cash provided by financing activities   138,054,000    3,609,000 
           
Effect of exchange rate changes on cash and cash equivalents   93,000    9,000 
           
Net increase in cash and cash equivalents   86,711,000    1,208,000 
           
Cash and cash equivalents at beginning of period   18,680,000    483,000 
           
Cash and cash equivalents at end of period  $105,391,000   $1,691,000 
           
Supplemental disclosures of cash flow information:          
Cash paid during the period for interest  $658,000   $71,000 
           
Non-cash investing and financing activities:          
Cancellation of convertible notes payable into shares of common stock  $   $2,689,000 
Cancellation of notes payable into shares of common stock  $449,000   $ 
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 into shares
of common stock
  $400,000   $