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SUBSEQUENT EVENTS
12 Months Ended
Dec. 31, 2022
Subsequent Events [Abstract]  
SUBSEQUENT EVENTS

33. SUBSEQUENT EVENTS

 

2022 Common ATM Offering

 

During the period between January 1, 2023 through March 13, 2023, the Company sold an aggregate of 32.0 million shares of common stock pursuant to the 2022 Common ATM Offering for gross proceeds of $4.2 million. On March 13, 2023, the Company announced that effective March 17, 2023, the 2022 Common ATM Offering would be terminated and that the Company would not make any further sales thereunder, effective immediately.

 

2022 Preferred ATM Offering

 

During the period between January 1, 2023 through April 15, 2023, the Company sold an aggregate of 109,114 shares of Series D Preferred Stock pursuant to the 2022 Preferred ATM Offering for gross proceeds of $1.4 million.

 

Investments in Alpha Fund

 

During the period between January 1, 2023 through April 15, 2023, the Company purchased an additional $0.6 million of limited partnership interests in the Alpha Fund. As of April 15, 2023, the Company had subscribed for and funded $33.9 million of limited partnership interests in the Alpha Fund.

 

Investments by Alpha Fund

 

On December 29, 2022, Alpha Fund purchased 1.9 million shares of the Company’s common stock in open market transactions at an average purchase price of $0.10 per share, which stock purchase settled in January 2023.

 

Share Exchange Agreement with BMI

 

The Company entered into a Share Exchange Agreement (the “Agreement”) with BMI and sold to BMI all of the outstanding shares of capital stock of the Company’s subsidiary, BitNile.com, Inc. (“BitNile.com”) as well as the securities of Earnity, Inc. (“Earnity”) beneficially owned by BitNile.com as of the date of the Agreement (the “Transaction”). As consideration for the acquisition, BMI issued shares of preferred stock convertible into common stock of BMI representing approximately 92.4% of BMI’s outstanding common stock. Pending approval of the transaction by BMI’s shareholders, the preferred stock combined are subject to a 19.9% beneficial ownership limitation.

 

The holders of preferred stock will be entitled to receive dividends at a rate of 5% of the stated value of the preferred stock.

 

The Company is entitled to appoint three members to the board of directors of BMI, and following shareholder approval, a majority of the Board.

 

 

March 28, 2023 Security Purchase Agreement

 

On March 28, 2023, the Company, entered into a Securities Purchase Agreement (the “Purchase Agreement”) with certain institutional investors (the “Investors”), pursuant to which the Company agreed to issue and sell, in a private placement (the “Offering”), an aggregate of 100,000 shares of its preferred stock, with each such share having a stated value of $100.00 and consisting of (i) 83,000 shares of Series E Convertible Preferred Stock (the “Series E Preferred Stock”), (ii) 1,000 shares of Series F Convertible Preferred Stock (the “Series F Preferred Stock”) and (iii) 16,000 shares of Series G Convertible Preferred Stock (the “Series G Preferred Stock” and collectively, the “Preferred Shares”). The Preferred Shares will be convertible into shares of the Company’s common stock at the option of the holders and, in certain circumstances, by the Company.

 

Each share of Series E Preferred Stock and Series F Preferred Stock had a purchase price of $100.00, equal to each such share’s stated value. The purchase price of the Series E Preferred Stock and the Series F Preferred Stock was paid for by the Investors’ canceling outstanding secured promissory notes in the principal amount of $8.4 million, whereas the purchase price of the shares of Series G Preferred Stock consisted of accrued but unpaid interest on these notes, as well as other good and valuable consideration. Each Preferred Share is convertible into shares of the Company’s common stock at a conversion price equal to 85% of the closing sale price of the common stock on the trading day prior to the date of conversion, subject to a floor price of $0.10.

 

12% Term Note

 

On April 5, 2023, the Company issued a term note with a principal amount of $1.1 million, bearing an interest rate of 12%. The term note was issued at a discount, with net proceeds to the Company amounting to $1.0 million. The note is scheduled to mature on June 5, 2023. The Company has the option to extend the maturity date by one month, upon payment of a $30,000 extension fee. Ault & Company, a related party, guaranteed the term note.

 

Amendment to 16% Secured Promissory Note

 

On April 6, 2023, the Company entered into an amendment agreement, effective as of March 16, 2023, with the Initial Investor related to the December 2022 16% secured promissory note extending the due date on the note to May 31, 2023, which will automatically extend to June 30, 2023 if the Company repays the balance outstanding on the note as of the extension date, which was $8.3 million, by May 31, 2023. The Company agreed to increase the principal amount of the note by approximately $2.0 million, reflecting a $1.7 million extension fee and $0.4 million of liquidated damages for failure to obtain an effective registration statement.