DESCRIPTION OF BUSINESS

12 Months Ended

Dec. 31, 2022

Accounting Policies [Abstract]

DESCRIPTION OF BUSINESS

1. DESCRIPTION OF BUSINESS

Ault Alliance, Inc., a Delaware corporation (“Ault Alliance” or the “Company”) was incorporated in September 2017. Ault Alliance 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 metaverse platform, oil exploration, crane services, defense/aerospace, industrial, automotive, medical/biopharma, consumer electronics, hotel operations and textiles. In addition, the Company extends credit to select entrepreneurial businesses through a licensed lending subsidiary. Ault Alliance 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 Company. All major investment and capital allocation decisions are made for the Company by Mr. Ault and the other members of the Executive Committee. The Company has the following eight reportable segments:

· Energy and Infrastructure (“Energy”) – crane operations, advanced textiles processing and oil exploration;

· Technology and Finance (“Fintech”) –commercial lending, activist investing, media, and digital learning;

· The Singing Machine Company, Inc. (“SMC”) – consumer electronics;

· BitNile, Inc. (“BNI”) – cryptocurrency mining operations;

· Giga-tronics Incorporated (“GIGA”) – defense solutions;

· Imperalis Holding Corp., also referred to as TurnOnGreen (“TurnOnGreen”) – commercial electronics solutions;

· Ault Global Real Estate Equities, Inc. (“AGREE”) – hotel operations and other commercial real estate holdings; and

· Ault Disruptive Technologies Corporation (“Ault Disruptive”) – a special purpose acquisition company (“SPAC”).

On January 3, 2023, the Company (then known as BitNile Holdings, Inc.) merged its wholly owned subsidiary, Ault Alliance, Inc. with and into BitNile Holdings, Inc. In connection with this upstream merger, Ault Alliance, Inc. was merged out of existence and the business of the Company continued as it was being conducted. Further, on January 3, 2023, the effective date of the merger, the Company changed its name to Ault Alliance, Inc. and its ticker was changed to “AULT.” The name change did not affect the rights of security holders of the Company.

1 A. RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS

This Amendment amends the Annual Report on Form 10-K of the Company for the year ended December 31, 2022, that was originally filed with the U.S. Securities and Exchange Commission on April 17, 2023. This Amendment only corrects an error in classification with respect to the redeemable noncontrolling interests in equity of subsidiaries, 11,500,000 shares of Ault Disruptive common stock (“the Redeemable Interests”), and the corresponding asset, cash and marketable securities held in trust account (“Cash”).

In accordance with Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity,” the redemption value of the Redeemable Interests was classified as temporary equity upon the completion of Ault Disruptive’s initial public offering. However, absent an extension, Ault Disruptive was required to complete a business combination by December 20, 2022. The Company notified Ault Disruptive of its intention to extend the period that Ault Disruptive would have to consummate its initial business combination by three months from the initial deadline; however, payment of the required deposit of $1,150,000 was not made. As a result, the correct classification of the redemption value of the Redeemable Interests was within current liabilities. The Redeemable Interests were erroneously recorded in temporary equity and have been reclassified to correct for the error within current liabilities and Cash has been reclassified within current assets to correspond with the current liability classification of the Redeemable Interests. The Company has restated its Consolidated Balance Sheets, as reflected in the Company’s Consolidated Balance Sheet below, to correct this misclassification.

	For the Year Ended
	December 31, 2022
	As Reported		Adjustment			As Restated
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	10,492,000				$	10,492,000
Restricted cash		3,563,000					3,563,000
Cash and marketable securities held in trust account		-		118,193,000			118,193,000
Marketable equity securities		6,590,000					6,590,000
Digital currencies		554,000					554,000
Accounts receivable		19,586,000					19,586,000
Accrued revenue		2,479,000					2,479,000
Inventories		22,080,000					22,080,000
Investment in promissory notes and other, related party		2,868,000					2,868,000
Loans receivable, current		7,385,000					7,385,000
Prepaid expenses and other current assets		11,711,000					11,711,000
TOTAL CURRENT ASSETS		87,308,000		118,193,000			205,501,000
Cash and marketable securities held in trust account		118,193,000		(118,193,000	)		-
Intangible assets, net		34,786,000					34,786,000
Goodwill		27,902,000					27,902,000
Property and equipment, net		229,914,000					229,914,000
Right-of-use assets		8,419,000					8,419,000
Investments in common stock, related parties		6,449,000					6,449,000
Investments in other equity securities		42,494,000					42,494,000
Investment in unconsolidated entity		-					-
Loans receivable, non-current		208,000					208,000
Other assets		5,841,000					5,841,000
TOTAL ASSETS	$	561,514,000	$	-		$	561,514,000
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable and accrued expenses	$	62,644,000				$	62,644,000
Investment margin accounts payable		767,000					767,000
Operating lease liability, current		2,975,000					2,975,000
Notes payable, net		39,621,000					39,621,000
Convertible notes payable, current		1,325,000					1,325,000
Redeemable noncontrolling interests in equity of subsidiaries, 11,500,000 shares of Ault Disruptive common stock at redemption value		-		117,993,000			117,993,000
TOTAL CURRENT LIABILITIES		107,332,000		117,993,000			225,325,000

	For the Year Ended
	December 31, 2022
	As Reported			Adjustment			As Restated
LONG TERM LIABILITIES
Operating lease liability, non-current		5,836,000						5,836,000
Notes payable		91,464,000						91,464,000
Convertible notes payable		11,451,000						11,451,000
Deferred underwriting commissions of Ault Disruptive subsidiary		3,450,000						3,450,000
TOTAL LIABILITIES		219,533,000			117,993,000			337,526,000
COMMITMENTS AND CONTINGENCIES
Redeemable noncontrolling interests in equity of subsidiaries, 11,500,000 shares of Ault Disruptive common stock at redemption value		117,993,000			(117,993,000	)		-
STOCKHOLDERS’ EQUITY
Series A Convertible Preferred Stock, $25 stated value per share, $0.001 par value – 1,000,000 shares authorized; 7,040 shares issued and outstanding at December 31, 2022 and 2021 (liquidation preference of $176,000 as of December 31, 2022 and 2021)		-						-
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 December 31, 2022 and 2021 (liquidation preference of $1,190,000 at December 31, 2022 and 2021)		-						-
Series D Cumulative Redeemable Perpetual Preferred Stock, $25 stated value per share, $0.001 par value – 2,000,000 shares authorized; 172,838 shares and 0 shares issued and outstanding at December 31, 2022 and 2021, respectively (liquidation preference of $4,321,000 and $0 as of December 31, 2022 and 2021, respectively)		-						-
Class A Common Stock, $0.001 par value – 500,000,000 shares authorized; 382,247,203 and 84,344,607 shares issued and outstanding at December 31, 2022 and 2021, respectively		382,000						382,000
Class B Common Stock, $0.001 par value – 25,000,000 shares authorized; 0 shares issued and outstanding at December 31, 2022 and 2021		-						-
Additional paid-in capital		565,523,000						565,523,000
Accumulated deficit		(329,078,000	)					(329,078,000	)
Accumulated other comprehensive loss		(1,100,000	)					(1,100,000	)
Treasury stock, at cost		(29,235,000	)					(29,235,000	)
TOTAL AULT ALLIANCE STOCKHOLDERS’ EQUITY		206,492,000			-			206,492,000
Non-controlling interest		17,496,000			-			17,496,000
TOTAL STOCKHOLDERS’ EQUITY		223,988,000			-			223,988,000
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	561,514,000		$	-		$	561,514,000