Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2022 | Nov. 18, 2022 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Sep. 30, 2022 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2022 | |
Current Fiscal Year End Date | --12-31 | |
Entity File Number | 1-12711 | |
Entity Registrant Name | BITNILE HOLDINGS, INC. | |
Entity Central Index Key | 0000896493 | |
Entity Tax Identification Number | 94-1721931 | |
Entity Incorporation, State or Country Code | DE | |
Entity Address, Address Line One | 11411 Southern Highlands Pkwy | |
Entity Address, Address Line Two | 240 | |
Entity Address, City or Town | Las Vegas | |
Entity Address, State or Province | NV | |
Entity Address, Postal Zip Code | 89141 | |
City Area Code | (949) | |
Local Phone Number | 444-5464 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 356,761,203 | |
Class Common Stock0.001 Par Value [Member] | ||
Title of 12(b) Security | Class A Common Stock, $0.001 par value | |
Trading Symbol | NILE | |
Security Exchange Name | NYSEAMER | |
Sec13.00 Series D Cumulative Redeemable Perpetual Preferred Stock Par Value0.001 Per Share [Member] | ||
Title of 12(b) Security | 13.00% Series D Cumulative Redeemable Perpetual Preferred Stock, par value $0.001 per share | |
Trading Symbol | NILE PRD | |
Security Exchange Name | NYSEAMER |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 10,126,000 | $ 15,912,000 |
Restricted cash | 4,617,000 | 5,321,000 |
Marketable equity securities | 8,561,000 | 40,380,000 |
Digital currencies | 2,092,000 | 2,165,000 |
Accounts receivable | 19,234,000 | 6,455,000 |
Accrued revenue | 2,474,000 | 2,283,000 |
Inventories | 28,848,000 | 5,482,000 |
Investment in promissory notes and other, related party | 2,818,000 | 2,842,000 |
Loans receivable, current | 6,861,000 | 13,337,000 |
Prepaid expenses and other current assets | 14,441,000 | 15,436,000 |
TOTAL CURRENT ASSETS | 100,072,000 | 109,613,000 |
Cash and marketable securities held in trust account | 117,421,000 | 116,725,000 |
Intangible assets, net | 14,095,000 | 4,035,000 |
Goodwill | 54,544,000 | 10,090,000 |
Property and equipment, net | 253,984,000 | 174,025,000 |
Right-of-use assets | 7,404,000 | 5,243,000 |
Investments in common stock, related parties | 12,394,000 | 13,230,000 |
Investments in other equity securities | 45,556,000 | 30,482,000 |
Investment in unconsolidated entity | 22,130,000 | |
Loans receivable, non-current | 500,000 | 1,000,000 |
Other assets | 4,935,000 | 3,713,000 |
TOTAL ASSETS | 610,905,000 | 490,286,000 |
CURRENT LIABILITIES | ||
Accounts payable and accrued expenses | 50,607,000 | 22,755,000 |
Investment margin accounts payable | 2,377,000 | 18,488,000 |
Operating lease liability, current | 2,825,000 | 1,123,000 |
Notes payable, net | 17,132,000 | 39,554,000 |
Convertible notes payable, current | 1,469,000 | |
TOTAL CURRENT LIABILITIES | 74,410,000 | 81,920,000 |
LONG TERM LIABILITIES | ||
Operating lease liability, non-current | 4,980,000 | 4,213,000 |
Notes payable | 58,310,000 | 55,055,000 |
Convertible notes payable | 13,878,000 | 468,000 |
Deferred underwriting commissions of Ault Disruptive subsidiary | 3,450,000 | 3,450,000 |
TOTAL LIABILITIES | 155,028,000 | 145,106,000 |
Redeemable noncontrolling interests in equity of subsidiaries | 117,114,000 | 116,725,000 |
STOCKHOLDERS’ EQUITY | ||
Additional paid-in capital | 557,418,000 | 385,644,000 |
Accumulated deficit | (207,647,000) | (145,600,000) |
Accumulated other comprehensive loss | (1,557,000) | (106,000) |
Treasury stock, at cost | (28,788,000) | (13,180,000) |
TOTAL BITNILE HOLDINGS STOCKHOLDERS’ EQUITY | 319,767,000 | 226,842,000 |
Non-controlling interest | 18,996,000 | 1,613,000 |
TOTAL STOCKHOLDERS’ EQUITY | 338,763,000 | 228,455,000 |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | 610,905,000 | 490,286,000 |
Series A Preferred Stock [Member] | ||
STOCKHOLDERS’ EQUITY | ||
Series D Cumulative Redeemable Perpetual Preferred Stock, $25 stated | ||
Series B Preferred Stock [Member] | ||
STOCKHOLDERS’ EQUITY | ||
Series D Cumulative Redeemable Perpetual Preferred Stock, $25 stated | ||
Common Class A [Member] | ||
STOCKHOLDERS’ EQUITY | ||
Class B Common Stock, $0.001 par value – 25,000,000 shares authorized; | 341,000 | 84,000 |
Common Class B [Member] | ||
STOCKHOLDERS’ EQUITY | ||
Class B Common Stock, $0.001 par value – 25,000,000 shares authorized; |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Preferred stock, shares authorized | 2,000,000 | |
Series A Preferred Stock [Member] | ||
Convertible preferred stock, stated value (in dollars per share) | $ 25 | $ 25 |
Preferred stock, par or stated value per share | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 7,040 | 7,040 |
Preferred stock, shares outstanding | 7,040 | 7,040 |
Preferred stock, redemption amount | $ 176,000 | $ 176,000 |
Series B Preferred Stock [Member] | ||
Convertible preferred stock, stated value (in dollars per share) | $ 10 | $ 10 |
Preferred stock, par or stated value per share | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 500,000 | 500,000 |
Preferred stock, shares issued | 125,000 | 125,000 |
Preferred stock, shares outstanding | 125,000 | 125,000 |
Preferred stock, liquidation preference, value | $ 1,190,000 | $ 1,190,000 |
Series D Preferred Stock [Member] | ||
Convertible preferred stock, stated value (in dollars per share) | $ 25 | $ 25 |
Preferred stock, par or stated value per share | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 2,000,000 | 2,000,000 |
Preferred stock, shares issued | 154,928 | 154,928 |
Preferred stock, shares outstanding | 0 | 0 |
Preferred stock, liquidation preference, value | $ 3,665,450 | $ 0 |
Common Class A [Member] | ||
Common stock, par or stated value per share | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 341,446,982 | 341,446,982 |
Common stock, shares outstanding | 84,344,607 | 84,344,607 |
Common Class B [Member] | ||
Common stock, par or stated value per share | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 25,000,000 | 25,000,000 |
Common stock, shares issued | 0 | 0 |
Common stock, shares outstanding | 0 | 0 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Total revenue | $ 49,778,000 | $ (30,794,000) | $ 99,970,000 | $ 44,580,000 |
Total cost of revenue | 28,678,000 | 5,271,000 | 51,541,000 | 16,657,000 |
Gross profit | 21,100,000 | (36,065,000) | 48,429,000 | 27,923,000 |
Operating expenses | ||||
Research and development | 521,000 | 524,000 | 1,945,000 | 1,657,000 |
Selling and marketing | 7,428,000 | 1,993,000 | 20,888,000 | 4,740,000 |
General and administrative | 15,947,000 | 11,292,000 | 48,666,000 | 24,376,000 |
Impairment of deposit due to vendor bankruptcy filing | 2,000,000 | 2,000,000 | ||
Impairment of mined cryptocurrency | 515,000 | 2,930,000 | ||
Total operating expenses | 26,411,000 | 13,809,000 | 76,429,000 | 30,773,000 |
Loss from operations | (5,311,000) | (49,874,000) | (28,000,000) | (2,850,000) |
Other income (expenses) | ||||
Interest and other income | 725,000 | 125,000 | 1,255,000 | 176,000 |
Accretion of discount on note receivable, related party | 4,210,000 | 4,210,000 | ||
Interest expense | (3,972,000) | (140,000) | (35,827,000) | (475,000) |
Change in fair value of marketable equity securities | 114,000 | (750,000) | 355,000 | (705,000) |
Realized gain on digital currencies and marketable securities | 595,000 | 30,000 | 661,000 | 428,000 |
Loss from investment in unconsolidated entity | (924,000) | |||
Gain on extinguishment of debt | 929,000 | |||
Change in fair value of warrant liability | (3,000) | 259,000 | (27,000) | (130,000) |
Total other (expenses) income, net | (2,541,000) | 3,734,000 | (34,507,000) | 4,433,000 |
(Loss) income before income taxes | (7,852,000) | (46,140,000) | (62,507,000) | 1,583,000 |
Income tax (provision) benefit | (144,000) | 3,366,000 | (361,000) | (144,000) |
Net (loss) income | (7,996,000) | (42,774,000) | (62,868,000) | 1,439,000 |
Net loss (income) attributable to non-controlling interest | 725,000 | (96,000) | 1,061,000 | (93,000) |
Net (loss) income attributable to BitNile Holdings, Inc. | (7,271,000) | (42,870,000) | (61,807,000) | 1,346,000 |
Preferred dividends | (190,000) | (4,000) | (239,000) | (13,000) |
Net (loss) income available to common stockholders | $ (7,461,000) | $ (42,874,000) | $ (62,046,000) | $ 1,333,000 |
Basic net (loss) income per common share | $ (0.03) | $ (0.73) | $ (0.27) | $ 0.03 |
Diluted net (loss) income per common share | $ (0.03) | $ (0.73) | $ (0.27) | $ 0.03 |
Weighted average basic common shares outstanding | 294,141,000 | 58,987,000 | 225,662,000 | 49,714,000 |
Weighted average diluted common shares outstanding | 294,141,000 | 58,987,000 | 225,662,000 | 50,145,000 |
Other comprehensive income (loss) | ||||
Foreign currency translation adjustment | $ 306,000 | $ (182,000) | $ (1,452,000) | $ (141,000) |
Net unrealized loss on derivative securities of related party | (4,849,000) | (7,773,000) | ||
Other comprehensive income (loss) | 306,000 | (5,031,000) | (1,452,000) | (7,914,000) |
Total comprehensive loss | (7,155,000) | (47,905,000) | (63,498,000) | (6,581,000) |
Cost of Sales [Member] | ||||
Total cost of revenue | 20,193,000 | 5,011,000 | 30,985,000 | 16,011,000 |
Cost of Sales Cryptocurrency [Member] | ||||
Total cost of revenue | 5,255,000 | 260,000 | 12,206,000 | 646,000 |
Cost of Sales Hotel Operations [Member] | ||||
Total cost of revenue | 3,230,000 | 8,350,000 | ||
Revenue [Member] | ||||
Total revenue | 27,031,000 | 7,803,000 | 43,539,000 | 24,272,000 |
Revenue Cryptocurrency Mining Net [Member] | ||||
Total revenue | 3,874,000 | 272,000 | 11,398,000 | 693,000 |
Hotel Operations [Member] | ||||
Total revenue | 5,513,000 | 12,809,000 | ||
Lending and Trading Activities [Member] | ||||
Total revenue | $ 13,360,000 | $ (38,869,000) | $ 32,224,000 | $ 19,615,000 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Unaudited) - USD ($) | Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | AOCI Attributable to Parent [Member] | Noncontrolling Interest [Member] | Treasury Stock [Member] | Total |
Beginning balance, value at Dec. 31, 2020 | $ 28,000 | $ 171,396,000 | $ (121,396,000) | $ (1,718,000) | $ 822,000 | $ 49,132,000 | ||
Beginning balance (in shares) at Dec. 31, 2020 | 132,040 | 27,753,562 | ||||||
Options | 1,833,000 | 1,833,000 | ||||||
Issuance of common stock for cash | $ 35,000 | 160,448,000 | 160,483,000 | |||||
Issuance of common stock for cash (in shares) | 34,684,910 | |||||||
Financing cost in connection with sales of common stock | (4,952,000) | (4,952,000) | ||||||
Increase in ownership interest of subsidiary | (587,000) | (587,000) | ||||||
Purchase of treasury stock - Ault Alpha | 2,773,000 | |||||||
Net income | 1,346,000 | 1,346,000 | ||||||
Preferred dividends | (13,000) | (13,000) | ||||||
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) | |||||
Issuance of common stock for restricted stock awards | ||||||||
Issuance of common stock for restricted stock awards (in shares) | 449,373 | |||||||
Stock-based compensation: | ||||||||
Restricted stock awards | 2,312,000 | 2,312,000 | ||||||
Issuance of stock options at Gresham Worldwide | 587,000 | 587,000 | ||||||
Adjustment to treasury stock for holdings in investment partnerships | (2,773,000) | (2,773,000) | ||||||
Comprehensive loss: | ||||||||
Purchase of treasury stock - Ault Alpha | (2,773,000) | |||||||
Issuance of common stock for conversion of convertible notes payable | 449,000 | 449,000 | ||||||
Common stock issued for cash (in shares) | 183,214 | |||||||
Issuance of common stock for conversion of convertible notes payable, related party | 400,000 | 400,000 | ||||||
Common stock issued for cash (in shares) | 275,862 | |||||||
Net unrealized loss on derivatives in related party | (7,773,000) | (7,773,000) | ||||||
Ending balance, value at Sep. 30, 2021 | $ 63,000 | 331,886,000 | (120,066,000) | (9,631,000) | 1,502,000 | (2,773,000) | 200,981,000 | |
Ending balance (in shares) at Sep. 30, 2021 | 132,040 | 63,346,921 | ||||||
Beginning balance, value at Jun. 30, 2021 | $ 56,000 | 311,759,000 | (77,190,000) | (4,600,000) | 1,364,000 | 231,389,000 | ||
Beginning balance (in shares) at Jun. 30, 2021 | 132,040 | 56,159,963 | ||||||
Options | 1,794,000 | 1,794,000 | ||||||
Issuance of common stock for cash | $ 7,000 | 16,432,000 | 16,439,000 | |||||
Issuance of common stock for cash (in shares) | 6,737,585 | |||||||
Financing cost in connection with sales of common stock | (411,000) | (411,000) | ||||||
Increase in ownership interest of subsidiary | (42,000) | (42,000) | ||||||
Net income | (42,870,000) | (42,870,000) | ||||||
Preferred dividends | (4,000) | (4,000) | ||||||
Foreign currency translation adjustments | (182,000) | (182,000) | ||||||
Net income attributable to non-controlling interest | 96,000 | 96,000 | ||||||
Other | (2,000) | (2,000) | ||||||
Issuance of common stock for restricted stock awards | ||||||||
Issuance of common stock for restricted stock awards (in shares) | 449,373 | |||||||
Stock-based compensation: | ||||||||
Restricted stock awards | 2,312,000 | 2,312,000 | ||||||
Issuance of stock options at Gresham Worldwide | 42,000 | 42,000 | ||||||
Adjustment to treasury stock for holdings in investment partnerships | (2,773,000) | (2,773,000) | ||||||
Comprehensive loss: | ||||||||
Net unrealized gain on derivatives in related party | (4,849,000) | (4,849,000) | ||||||
Ending balance, value at Sep. 30, 2021 | $ 63,000 | 331,886,000 | (120,066,000) | (9,631,000) | 1,502,000 | (2,773,000) | 200,981,000 | |
Ending balance (in shares) at Sep. 30, 2021 | 132,040 | 63,346,921 | ||||||
Beginning balance, value at Dec. 31, 2021 | $ 84,000 | 385,644,000 | (145,600,000) | (106,000) | 1,613,000 | (13,180,000) | 228,455,000 | |
Beginning balance (in shares) at Dec. 31, 2021 | 132,040 | 84,344,607 | ||||||
Preferred stock issued | 3,873,000 | 3,873,000 | ||||||
Preferred stock issued (in shares) | 154,928 | |||||||
Preferred stock offering costs | (602,000) | (602,000) | ||||||
Options | 5,190,000 | 556,000 | 5,746,000 | |||||
Issuance of Gresham Worldwide common stock for GIGA acquisition | 1,669,000 | 1,669,000 | ||||||
Issuance of common stock for cash | $ 257,000 | 167,726,000 | 167,983,000 | |||||
Issuance of common stock for cash (in shares) | 256,660,496 | |||||||
Financing cost in connection with sales of common stock | (4,103,000) | (4,103,000) | ||||||
Increase in ownership interest of subsidiary | (1,980,000) | (1,921,000) | (3,901,000) | |||||
Purchase of treasury stock - Ault Alpha | 15,607,000 | 15,607,000 | ||||||
Net income | (61,807,000) | (61,807,000) | ||||||
Preferred dividends | (239,000) | (239,000) | ||||||
Foreign currency translation adjustments | (1,452,000) | (1,452,000) | ||||||
Net income attributable to non-controlling interest | (1,061,000) | (1,061,000) | ||||||
Other | 1,000 | (1,000) | 1,000 | (1,000) | ||||
Issuance of common stock for restricted stock awards | ||||||||
Issuance of common stock for restricted stock awards (in shares) | 441,879 | |||||||
Stock-based compensation: | ||||||||
Issuance of stock options at Gresham Worldwide | 1,980,000 | 1,921,000 | 3,901,000 | |||||
Comprehensive loss: | ||||||||
Non-controlling interest from AVLP acquisition | 6,738,000 | 6,738,000 | ||||||
Purchase of treasury stock - Ault Alpha | (15,607,000) | (15,607,000) | ||||||
Ending balance, value at Sep. 30, 2022 | $ 341,000 | 557,418,000 | (207,647,000) | (1,557,000) | 18,996,000 | (28,788,000) | 338,763,000 | |
Ending balance (in shares) at Sep. 30, 2022 | 286,968 | 341,446,982 | ||||||
Beginning balance, value at Jun. 30, 2022 | $ 324,000 | 549,713,000 | (200,184,000) | (1,863,000) | 18,048,000 | (20,639,000) | 345,399,000 | |
Beginning balance (in shares) at Jun. 30, 2022 | 278,658 | 324,440,579 | ||||||
Preferred stock issued | 207,000 | 207,000 | ||||||
Preferred stock issued (in shares) | 8,310 | |||||||
Preferred stock offering costs | (65,000) | (65,000) | ||||||
Options | 1,563,000 | 479,000 | 2,042,000 | |||||
Issuance of Gresham Worldwide common stock for GIGA acquisition | 1,669,000 | 1,669,000 | ||||||
Issuance of common stock for cash | $ 17,000 | 4,540,000 | 4,557,000 | |||||
Issuance of common stock for cash (in shares) | 17,006,403 | |||||||
Financing cost in connection with sales of common stock | (79,000) | (79,000) | ||||||
Increase in ownership interest of subsidiary | (132,000) | (1,539,000) | (1,671,000) | |||||
Non-controlling interest from GIGA acquisition | 2,735,000 | 2,735,000 | ||||||
Purchase of treasury stock - Ault Alpha | (8,148,000) | (8,148,000) | ||||||
Net income | (7,271,000) | (7,271,000) | ||||||
Preferred dividends | (190,000) | (190,000) | ||||||
Foreign currency translation adjustments | 306,000 | 306,000 | ||||||
Net income attributable to non-controlling interest | (725,000) | (725,000) | ||||||
Other | 2,000 | (2,000) | (2,000) | (1,000) | (3,000) | |||
Stock-based compensation: | ||||||||
Issuance of stock options at Gresham Worldwide | 132,000 | 1,539,000 | 1,671,000 | |||||
Comprehensive loss: | ||||||||
Non-controlling interest from SMC acquisition | 10,336,000 | 10,336,000 | ||||||
Purchase of treasury stock - Ault Alpha | 8,148,000 | 8,148,000 | ||||||
Ending balance, value at Sep. 30, 2022 | $ 341,000 | $ 557,418,000 | $ (207,647,000) | $ (1,557,000) | $ 18,996,000 | $ (28,788,000) | $ 338,763,000 | |
Ending balance (in shares) at Sep. 30, 2022 | 286,968 | 341,446,982 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Cash flows from operating activities: | ||
Net (loss) income | $ (62,868,000) | $ 1,439,000 |
Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 11,977,000 | 1,713,000 |
Interest expense – debt discount | 26,958,000 | 61,000 |
Gain on extinguishment of debt | (929,000) | |
Change in fair value of warrant liability | (917,000) | (259,000) |
Accretion of original issue discount on notes receivable – related party | (4,213,000) | |
Accretion of original issue discount on notes receivable | (618,000) | (366,000) |
Increase in accrued interest on notes receivable – related party | (148,000) | (119,000) |
Stock-based compensation | 5,746,000 | 4,732,000 |
Impairment of deposit due to vendor bankruptcy filing | 2,000,000 | |
Impairment of cryptocurrencies | 2,930,000 | |
Realized gains on sale of marketable securities | (19,194,000) | (15,154,000) |
Unrealized losses on marketable securities | 16,937,000 | 6,353,000 |
Unrealized losses (gains) on investments in common stock, related parties | 5,676,000 | (6,150,000) |
Unrealized gains on equity securities | (32,949,000) | (2,795,000) |
Loss from investment in unconsolidated entity | 924,000 | |
Loss on remeasurement of investment in unconsolidated entity | 2,700,000 | |
Changes in operating assets and liabilities: | ||
Marketable equity securities | 68,532,000 | (34,196,000) |
Accounts receivable | (3,022,000) | (1,270,000) |
Accrued revenue | (109,000) | (166,000) |
Inventories | (5,867,000) | (492,000) |
Prepaid expenses and other current assets | 1,780,000 | (5,155,000) |
Digital currencies | (12,227,000) | |
Other assets | (2,944,000) | (407,000) |
Accounts payable and accrued expenses | 8,974,000 | (1,082,000) |
Other current liabilities | 2,210,000 | |
Lease liabilities | (1,334,000) | (666,000) |
Net cash provided by (used in) operating activities | 12,937,000 | (56,911,000) |
Cash flows from investing activities: | ||
Purchase of property and equipment | (84,500,000) | (28,145,000) |
Investment in promissory notes and other, related parties | (2,200,000) | (4,994,000) |
Investments in common stock and warrants, related parties | (4,840,000) | (19,590,000) |
Investment in real property, related party | (2,670,000) | |
Proceeds from sale of investment in real property, related party | 2,670,000 | |
Purchase of SMC, net of cash received | (8,239,000) | |
Purchase of GIGA, net of cash received | (3,687,000) | |
Cash received upon acquisition of AVLP | 1,245,000 | |
Acquisition of non-controlling interests | (3,901,000) | |
Purchase of marketable equity securities | (1,981,000) | (2,144,000) |
Sales of marketable equity securities | 11,748,000 | 430,000 |
Investments in loans receivable | (7,081,000) | |
Principal payments on loans receivable | 10,525,000 | |
Sale of digital currencies | 8,952,000 | |
Investments in equity securities | (22,449,000) | (14,287,000) |
Net cash used in investing activities | (106,408,000) | (68,730,000) |
Cash flows from financing activities: | ||
Gross proceeds from sales of common stock | 167,983,000 | 160,483,000 |
Financing cost in connection with sales of common stock | (4,103,000) | (4,952,000) |
Proceeds from sales of preferred stock | 3,873,000 | |
Financing cost in connection with sales of preferred stock | (602,000) | |
Proceeds from notes payable | 18,565,000 | 724,000 |
Repayment of margin accounts | (16,111,000) | |
Payments on notes payable | (67,698,000) | (2,263,000) |
Payments of preferred dividends | (239,000) | (13,000) |
Purchase of treasury stock | (15,607,000) | (2,773,000) |
Payments on revolving credit facilities, net | (125,000) | |
Net cash provided by financing activities | 86,061,000 | 151,081,000 |
Effect of exchange rate changes on cash and cash equivalents | 920,000 | (73,000) |
Net (decrease) increase in cash and cash equivalents and restricted cash | (6,490,000) | 25,367,000 |
Cash and cash equivalents and restricted cash at beginning of period | 21,233,000 | 18,680,000 |
Cash and cash equivalents and restricted cash at end of period | 14,743,000 | 44,047,000 |
Supplemental disclosures of cash flow information: | ||
Cash paid during the period for interest | 5,202,000 | 712,000 |
Non-cash investing and financing activities: | ||
Conversion of convertible notes payable into shares of common stock | 449,000 | |
Settlement of accounts payable with digital currency | 417,000 | 119,000 |
Conversion of investment in unconsolidated entity for acquisition of AVLP | 20,706,000 | |
Conversion of convertible notes payable, related party into shares of common stock | 400,000 | 400,000 |
Conversion of debt and equity securities to marketable securities | 40,324,000 | 2,656,000 |
Conversion of loans receivable to marketable securities | 3,650,000 | |
Conversion of interest receivable to marketable securities | 250,000 | |
Conversion of loans receivable to debt and equity securities | 150,000 | |
Recognition of new operating lease right-of-use assets and lease liabilities | $ 2,188,000 |
DESCRIPTION OF BUSINESS
DESCRIPTION OF BUSINESS | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
DESCRIPTION OF BUSINESS | DESCRIPTION OF BUSINESS BitNile Holdings, Inc., a Delaware corporation (“BitNile” or the “Company”) was incorporated in September 2017. BitNile 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 oil exploration, defense/aerospace, industrial, automotive, medical/biopharma, karaoke audio equipment, hotel operations and textiles. In addition, the Company extends credit to select entrepreneurial businesses through a licensed lending subsidiary. BitNile 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 seven reportable segments: · BitNile, Inc. (“BNI”) – cryptocurrency mining operations; · Ault Alliance, Inc. (“Ault Alliance”) – commercial lending, activist investing, advanced textiles processing technology, media, and digital learning; · Gresham Worldwide, Inc. (“GWW”) – defense solutions; · Imperalis Holding Corp., to be renamed TurnOnGreen, Inc. (“TurnOnGreen”) – commercial electronics solutions; · The Singing Machine Company, Inc. (“SMC”) – karaoke audio equipment; · 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”). |
LIQUIDITY AND FINANCIAL CONDITI
LIQUIDITY AND FINANCIAL CONDITION | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
LIQUIDITY AND FINANCIAL CONDITION | 2. LIQUIDITY AND FINANCIAL CONDITION As of September 30, 2022, the Company had cash and cash equivalents of $ 10.1 25.7 million |
BASIS OF PRESENTATION AND SIGNI
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES | 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, 2021, filed with the Securities and Exchange Commission (the “SEC”) on April 15, 2022. The condensed consolidated balance sheet as of December 31, 2021 was derived from the Company’s audited 2021 financial statements contained in the above referenced Form 10-K. Results of the three and nine months ended September 30, 2022, are not necessarily indicative of the results to be expected for the full year ending December 31, 2022. Significant Accounting Policies Other than as noted below, there have been no material changes to the Company’s significant accounting policies previously disclosed in the 2021 Annual Report. Business Combination The Company allocates the purchase price of an acquired business to the tangible and intangible assets acquired and liabilities assumed based upon their estimated fair values on the acquisition date. Any excess of the purchase price over the fair value of the net assets acquired is recorded as goodwill. The purchase price allocation process requires management to make significant estimates and assumptions at the acquisition date with respect to intangible assets. The allocation of the consideration transferred in certain cases may be subject to revision based on the final determination of fair values during the measurement period, which may be up to one year from the acquisition date. Direct transaction costs associated with the business combination are expensed as incurred. The Company includes the results of operations of the business that it has acquired in its consolidated results prospectively from the date of acquisition. If the business combination is achieved in stages, the acquisition date carrying value of the acquirer’s previously held equity interest in the acquirer is re-measured to fair value at the acquisition date; any gains or losses arising from such re-measurement are recognized in profit or loss. Oil and Gas Properties The Company uses the successful efforts method of accounting for oil and natural gas producing properties, as further defined under Accounting Standards Codification (“ASC”) 932, Extractive Activities - Oil and Natural Gas. Under this method, costs to acquire mineral interests in oil and natural gas properties are capitalized. The costs of non-producing mineral interests and associated acquisition costs are capitalized as unproved properties pending the results of leasing efforts and drilling activities of exploration and production (“E&P”) operators on our interests. As unproved properties are determined to have proved reserves, the related costs are transferred to proved oil and gas properties. Capitalized costs for proved oil and natural gas mineral interests are depleted on a unit-of-production basis over total proved reserves. For depletion of proved oil and gas properties, interests are grouped in a reasonable aggregation of properties with common geological structural features or stratigraphic conditions. Impairment of Oil and Gas Properties The Company evaluates its producing properties for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. When assessing proved properties for impairment, the Company compares the expected undiscounted future cash flows of the proved properties to the carrying amount of the proved properties to determine recoverability. If the carrying amount of proved properties exceeds the expected undiscounted future cash flows, the carrying amount is written down to the properties’ estimated fair value, which is measured as the present value of the expected future cash flows of such properties. The factors used to determine fair value include estimates of proved reserves, future commodity prices, timing of future production, and a risk-adjusted discount rate. The proved property impairment test is primarily impacted by future commodity prices, changes in estimated reserve quantities, estimates of future production, overall proved property balances, and depletion expense. If pricing conditions decline or are depressed, or if there is a negative impact on one or more of the other components of the calculation, we may incur proved property impairments in future periods. Unproved oil and gas properties are assessed periodically for impairment of value, and a loss is recognized at the time of impairment by charging capitalized costs to expense. Impairment is assessed when facts and circumstances indicate that the carrying value may not be recoverable, at which point an impairment loss is recognized to the extent the carrying value exceeds the estimated recoverable value. Factors used in the assessment include but are not limited to commodity price outlooks and current and future operator activity in the respective basins. The Company recognized no impairment of unproved properties for the three and nine months ended September 30, 2022 and 2021. Reclassifications Certain prior period amounts have been reclassified for comparative purposes to conform to the current-period financial statement presentation. These reclassifications had no effect on previously reported results of operations. Recently Adopted Accounting Standards In May 2021, the Financial Accountings Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2021-04, “Earnings Per Share (Topic 260), Debt-Modifications and Extinguishments (Subtopic 470-50), Compensation-Stock Compensation (Topic 718), and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815- 40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options.” The guidance became effective for the Company on January 1, 2022. The Company adopted the guidance on January 1, 2022, and has concluded the adoption did not have a material impact on its unaudited condensed consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments - Credit Losses,” (“ASU No. 2016-13”) to improve information on credit losses for financial assets and net investment in leases that are not accounted for at fair value through net income. ASU 2016-13 replaces the current incurred loss impairment methodology with a methodology that reflects expected credit losses. This guidance is effective for the Company beginning on January 1, 2023, with early adoption permitted. The Company does not expect that the adoption of this standard will have a significant impact on its condensed consolidated financial statements. In August 2020, the FASB issued ASU 2020-06, “Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40)-Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity” (“ASU 2020-06”). The ASU simplifies accounting for convertible instruments by removing major separation models required under current GAAP. Consequently, more convertible debt instruments will be reported as a single liability instrument with no separate accounting for embedded conversion features. ASU 2020-06 removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception, which will permit more equity contracts to qualify for it. ASU 2020-06 also simplifies the diluted net income per share calculation in certain areas. The amendments in ASU 2020-06 are effective for smaller reporting companies as defined by the SEC, for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Effective January 1, 2022, the Company early adopted ASU 2020-06 using the modified retrospective approach, which resulted in no impact on its condensed consolidated financial statements. In October 2021, the FASB issued ASU 2021-08, “Business Combinations (Topic 805), Accounting for Contract Assets and Contract Liabilities from Contracts with Customers,” which requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606, “Revenue from Contracts with Customers.” The guidance will result in the acquirer recognizing contract assets and contract liabilities at the same amounts recorded by the acquiree. The guidance should be applied prospectively to acquisitions occurring on or after the effective date. The guidance is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption is permitted, including in interim periods, for any financial statements that have not yet been issued. The Company is currently evaluating this guidance to determine the impact it may have on its condensed consolidated financial statements. |
REVENUE DISAGGREGATION
REVENUE DISAGGREGATION | 9 Months Ended |
Sep. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE DISAGGREGATION | 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, 2022 and 2021. 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. The Company’s disaggregated revenues consisted of the following for the three months ended September 30, 2022: Three months ended September 30, 2022 GWW TurnOn Green Ault SMC BNI AGREE Total Primary Geographical Markets North America $ 2,472,000 $ 1,428,000 $ - $ 16,138,000 $ 4,146,000 $ 5,513,000 $ 29,697,000 Europe 2,288,000 32,000 201,000 306,000 - - 2,827,000 Middle East and other 3,022,000 202,000 - 670,000 - - 3,894,000 Revenue from contracts with customers 7,782,000 1,662,000 201,000 17,114,000 4,146,000 5,513,000 36,418,000 Revenue, lending and trading activities - - 13,360,000 - - - 13,360,000 Total revenue $ 7,782,000 $ 1,662,000 $ 13,561,000 $ 17,114,000 $ 4,146,000 $ 5,513,000 $ 49,778,000 Major Goods or Services Power supply units $ 2,799,000 $ 1,480,000 $ - $ - $ - $ - $ 4,279,000 Digital currency mining, net - - - - 3,874,000 - 3,874,000 Hotel operations - - - - - 5,513,000 5,513,000 Karaoke machines and related - - - 17,114,000 - - 17,114,000 Other 4,983,000 182,000 201,000 - 272,000 - 5,638,000 Revenue from contracts with customers 7,782,000 1,662,000 201,000 17,114,000 4,146,000 5,513,000 36,418,000 Revenue, lending and trading activities - - 13,360,000 - - - 13,360,000 Total revenue $ 7,782,000 $ 1,662,000 $ 13,561,000 $ 17,114,000 $ 4,146,000 $ 5,513,000 $ 49,778,000 Timing of Revenue Recognition Goods transferred at a point in time $ 5,821,000 $ 1,662,000 $ 201,000 $ 17,114,000 $ 4,146,000 $ 5,513,000 $ 34,457,000 Services transferred over time 1,961,000 - - - - - 1,961,000 Revenue from contracts with customers $ 7,782,000 $ 1,662,000 $ 201,000 $ 17,114,000 $ 4,146,000 $ 5,513,000 $ 36,418,000 The Company’s disaggregated revenues consisted of the following for the nine months ended September 30, 2022: Nine months ended September 30, 2022 GWW TurnOn Green Ault SMC BNI AGREE Total Primary Geographical Markets North America $ 5,094,000 $ 3,262,000 $ 19,000 $ 16,138,000 $ 12,220,000 $ 12,809,000 $ 49,542,000 Europe 7,007,000 79,000 201,000 306,000 - - 7,593,000 Middle East and other 9,429,000 512,000 - 670,000 - - 10,611,000 Revenue from contracts with customers 21,530,000 3,853,000 220,000 17,114,000 12,220,000 12,809,000 67,746,000 Revenue, lending and trading activities - - 32,224,000 - - - 32,224,000 Total revenue $ 21,530,000 $ 3,853,000 $ 32,444,000 $ 17,114,000 $ 12,220,000 $ 12,809,000 $ 99,970,000 Major Goods or Services Power supply units $ 6,928,000 $ 3,592,000 $ - $ - $ - $ - $ 10,520,000 Healthcare diagnostic systems 2,285,000 - - - - - 2,285,000 Defense systems 6,842,000 - - - - - 6,842,000 Digital currency mining - - - - 11,398,000 - 11,398,000 Hotel operations - - - - - 12,809,000 12,809,000 Karaoke machines and related - - - 17,114,000 - - 17,114,000 Other 5,475,000 261,000 220,000 - 822,000 - 6,778,000 Revenue from contracts with customers 21,530,000 3,853,000 220,000 17,114,000 12,220,000 12,809,000 67,746,000 Revenue, lending and trading activities - - 32,224,000 - - - 32,224,000 Total revenue $ 21,530,000 $ 3,853,000 $ 32,444,000 $ 17,114,000 $ 12,220,000 $ 12,809,000 $ 99,970,000 Timing of Revenue Recognition Goods transferred at a point in time $ 12,934,000 $ 3,853,000 $ 220,000 $ 17,114,000 $ 12,220,000 $ 12,809,000 $ 59,150,000 Services transferred over time 8,596,000 - - - - - 8,596,000 Revenue from contracts with customers $ 21,530,000 $ 3,853,000 $ 220,000 $ 17,114,000 $ 12,220,000 $ 12,809,000 $ 67,746,000 The Company’s disaggregated revenues consisted 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 Power supply units $ 1,256,000 $ 1,094,000 $ - $ 2,350,000 Defense systems 2,940,000 - - 2,940,000 Digital currency mining - - 272,000 272,000 Other 2,177,000 - 336,000 2,513,000 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 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 Power supply units $ 1,734,000 $ 4,308,000 $ — $ 6,042,000 Power supply systems 5,253,000 — — 5,253,000 Defense systems 7,731,000 — — 7,731,000 Digital currency mining 693,000 693,000 Other 4,480,000 — 766,000 5,246,000 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 |
FAIR VALUE OF FINANCIAL INSTRUM
FAIR VALUE OF FINANCIAL INSTRUMENTS | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | 5. FAIR VALUE OF FINANCIAL INSTRUMENTS 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, 2022 Total Level 1 Level 2 Level 3 Investment in common stock of Alzamend Neuro, Inc. $ 12,394,000 $ 12,394,000 $ - $ - Investments in marketable equity securities 8,561,000 8,561,000 - - Cash and marketable securities held in trust account 117,421,000 117,421,000 - - Investments in other equity securities 3,916,000 - - 3,916,000 Total assets measured at fair value $ 142,292,000 $ 138,376,000 $ - $ 3,916,000 Fair Value Measurement at December 31, 2021 Total Level 1 Level 2 Level 3 Investment in common stock of Alzamend – a related party 13,230,000 13,230,000 - - Investments in marketable equity securities 40,380,000 40,380,000 - - Cash and marketable securities held in trust account 116,725,000 116,725,000 - - Investments in other equity securities 9,215,000 - - 9,215,000 Total assets measured at fair value $ 179,550,000 $ 170,335,000 $ - $ 9,215,000 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. For investments where little or no public market exists, management’s determination of fair value is based on the best available information which may incorporate management’s own assumptions and involves a significant degree of judgment, taking into consideration various factors including earnings history, financial condition, recent sales prices of the issuer’s securities and liquidity risks. The following table summarizes the changes in investments in other 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, 2022: Investments in Balance at January 1, 2022 $ 9,215,000 Investment in preferred stock 6,495,000 Change in fair value of financial instruments 25,850,000 Conversion to marketable securities (37,644,000 ) Balance at September 30, 2022 $ 3,916,000 Other equity securities also include investments in entities that do not have a readily determinable fair value and do not report net asset value per share. These investments are accounted for using a measurement alternative under which they are measured at cost and adjusted for observable price changes and impairments. Observable price changes result from, among other things, equity transactions for the same issuer executed during the reporting period, including subsequent equity offerings or other reported equity transactions related to the same issuer. For these transactions to be considered observable price changes of the same issuer, the Company evaluates whether these transactions have similar rights and obligations, including voting rights, distribution preferences, conversion rights, and other factors, to the investments the Company holds. Any investments adjusted to their fair value by applying the measurement alternative are disclosed as nonrecurring fair value measurements, including the level in the fair value hierarchy that was used. As of September 30, 2022 and December 31, 2021, investments in other equity securities valued using a measurement alternative of $ 41.6 21.4 The following table presents information on certain assets measured at fair value on a recurring basis by level within the fair value hierarchy as of September 30, 2022 and December 31, 2021. There were no observable price changes or indicators of impairment for these investments during the nine months ended September 30, 2022. Fair Value Measurement Using Total Quoted prices Other Significant As of September 30, 2022 Investments in other equity securities that do not report net asset $ 41,641,000 $ - $ - $ 41,641,000 Fair Value Measurement Using Total Quoted prices Other Significant As of December 31, 2021 Investments in other equity securities that do not report net asset $ 21,241,000 $ - $ - $ 21,241,000 |
MARKETABLE EQUITY SECURITIES
MARKETABLE EQUITY SECURITIES | 9 Months Ended |
Sep. 30, 2022 | |
Marketable Equity Securities | |
MARKETABLE EQUITY SECURITIES | 6. MARKETABLE EQUITY SECURITIES Marketable equity securities with readily determinable market prices consisted of the following as of September 30, 2022 and December 31, 2021: Marketable equity securities at September 30, 2022 Gross unrealized Gross unrealized Cost gains losses Fair value Common shares $ 16,182,000 $ 281,000 $ (7,902,000 ) $ 8,561,000 Marketable equity securities at December 31, 2021 Gross unrealized Gross unrealized Cost gains losses Fair value Common shares $ 53,475,000 $ 32,000 $ (13,127,000 ) $ 40,380,000 The Company’s investment in marketable equity securities are revalued on each balance sheet date. |
PROPERTY AND EQUIPMENT, NET
PROPERTY AND EQUIPMENT, NET | 9 Months Ended |
Sep. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT, NET | 7. PROPERTY AND EQUIPMENT, NET At September 30, 2022 and December 31, 2021, property and equipment consisted of: September 30, 2022 December 31, 2021 Cryptocurrency machines and related equipment $ 131,141,000 $ 10,763,000 Computer, software and related equipment 20,315,000 8,884,000 Office furniture and equipment 2,750,000 702,000 Oil and natural gas properties, unproved properties 972,000 - Land 25,646,000 25,696,000 Building and improvements 76,012,000 68,959,000 256,836,000 115,004,000 Accumulated depreciation and amortization (14,180,000 ) (5,096,000 ) Property and equipment placed in service, net 242,656,000 109,908,000 Deposits on cryptocurrency machines 11,328,000 64,117,000 Property and equipment, net $ 253,984,000 $ 174,025,000 Summary of depreciation expense: For the Three Months Ended For the Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Depreciation expense $ 3,942,000 $ 265,000 $ 10,229,000 $ 711,000 Ault Energy Oil and Gas Properties On July 11, 2022, the Company announced the formation of Ault Energy, LLC (“Ault Energy”), as an indirect wholly-owned subsidiary of the Company through Ault Alliance. Ault Energy is partnering with White River Holdings Corp. (“White River”), a wholly owned subsidiary of Ecoark Holdings, Inc. (“Ecoark”), on drilling projects across 30,000 acres in Texas, Louisiana and Mississippi. Ault Energy, as the designee of Ault Lending, LLC (“Ault Lending”), has the right to purchase up to 25%, or such higher percentages at the discretion of White River, in various drilling projects of White River. In August 2022, Ault Energy purchased a 40% working interest of the Harry O’Neal 20-9 No.1 drilling project in Mississippi for $972,000 included in property and equipment. Compute North Bankruptcy On September 22, 2022, Compute North Holdings, Inc. (along with its affiliated debtors, collectively, “Compute North”), filed for chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Southern District of Texas under Chapter 11 of the U.S. Bankruptcy Code (11 U.S. Code section 101 et seq.). At the time of Compute North’s bankruptcy filing, BitNile had 6,572 Bitcoin miners with a carrying amount of $38.0 million, classified within property and equipment on the consolidated balance sheet, with Compute North at the Wolf Hollow hosting facility in Texas. Additionally, the Company has a deposit of approximately $2.0 million with Compute North for services yet to be performed by Compute North. The ultimate outcome of the bankruptcy process, and its impact on the deposit held by the Company, remains to be determined. The Company assessed this financial exposure and recorded an impairment of the deposit totaling $2 million during the three months ended September 30, 2022. The Company has inspected the Bitcoin miners that are installed at the hosting facility in Texas. No impairment on the mining equipment was recorded as of September 30, 2022. The Company has retained counsel to assist in this matter. |
BUSINESS COMBINATIONS
BUSINESS COMBINATIONS | 9 Months Ended |
Sep. 30, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
BUSINESS COMBINATIONS | 8. BUSINESS COMBINATIONS Avalanche International Corp. (“AVLP”) Acquisition On June 1, 2022, the Company converted the principal amount under the convertible promissory notes issued to it by AVLP and accrued unpaid interest into common stock of AVLP. The Company converted $ 20.0 5.9 20 92 Prior to the conversion of the convertible promissory notes, the Company accounted for its investment in AVLP as an investment in an unconsolidated entity under the equity method of accounting. In connection with the conversion of the convertible promissory notes, the Company’s consolidated financial statements now include all of the accounts of AVLP, and any significant intercompany balances and transactions have been eliminated in consolidation. The consideration transferred for the Company’s approximate 92% ownership interest in connection with this acquisition aggregated $20.7 million, which represented the fair value of the Company’s holdings in AVLP immediately prior to conversion. The carrying amount of the Company’s holdings in AVLP immediately prior to conversion was $23.4 million, resulting in a $2.7 million loss for the related remeasurement, which was recognized in interest and other income. The Company estimated the fair values of assets acquired and liabilities assumed using valuation techniques, such as the income, cost and market approaches. The fair values are based on available historical information and on future expectations and assumptions deemed reasonable by management but are inherently uncertain. The income method to measure the fair value of intangible assets, is based on forecasts of the expected future cash flows attributable to the respective assets. Significant estimates and assumptions inherent in the valuations reflected a consideration of other marketplace participants and included the amount and timing of future cash flows (including expected growth rates and profitability), the underlying product or technology life cycles, economic barriers to entry and the discount rate applied to the cash flows. Unanticipated market or macroeconomic events and circumstances could affect the accuracy or validity of the estimates and assumptions. The allocation of the total consideration transferred to the assets acquired, including intangible assets and goodwill, and the liabilities assumed is preliminary and could be revised as a result of additional information obtained due to the finalization of a third-party valuation report, leases and related commitments, tax related matters and contingencies and certain assets and liabilities, including receivables and payables. Amounts will be finalized within the measurement period, which will not exceed one year from the acquisition date. Goodwill represents the excess of the purchase price over the preliminary fair value of identifiable assets acquired and liabilities assumed at the acquisition date and is primarily attributable to the assembled workforce and expected synergies at the time of the acquisition. The goodwill resulting from this acquisition is not tax deductible. The following table presents the final allocation of the consideration transferred to the assets acquired and liabilities assumed based on their fair values. Preliminary Total purchase consideration $ 20,706,000 Fair value of non-controlling interest 6,738,000 Total consideration $ 27,444,000 Identifiable net liabilities assumed: Cash $ 1,245,000 Prepaid expenses and other current assets 55,000 Property and equipment 5,057,000 Note receivable 800,000 Accounts payable and accrued expenses (5,018,000 ) Convertible notes payable, principal (9,734,000 ) Fair value of embedded derivative (1,226,000 ) Fair value of bifurcated conversion option (4,425,000 ) Fair value of bifurcated put option (200,000 ) Net liabilities assumed (13,446,000 ) Goodwill $ 40,890,000 The Company consolidates the results of AVLP on a one-month lag, therefore the statements of operations include results for AVLP for the three months ended August 31, 2022. Overview of SMC Acquisition Beginning in June 2022, the Company, through its subsidiary Ault Lending, began making open market purchases of SMC common stock. These purchases granted the Company a greater than 20% effective ownership on June 9, 2022, and subsequently, on June 15, 2022, the Company owned more than 50% of the issued and outstanding common stock of SMC. The Company’s ownership of SMC stood at approximately 57% as of September 30, 2022. As of June 15, 2022 (“Acquisition Date”), the purchase price of the common stock acquired totaled $ 7.4 million 3.1 million 10.5 million 10.3 million The tradenames and developed technology intangible assets were valued using the relief-from-royalty method. The relief-from-royalty method is one of the methods under the income approach wherein estimates of a company’s earnings attributable to the intangible asset are based on the royalty rate the company would have paid for the use of the asset if it did not own it. Royalty payments are estimated by applying royalty rates between of 0.5% and 1.0% to the prospective revenue attributable to the intangible asset. The resulting annual royalty payments are tax-affected and then discounted to present value. The Company determined an estimated fair value of customer relationships using an income approach utilizing a discounted cash flow methodology. The analysis included assumptions regarding the development of new businesses and organic growth rates, a discount rate of 12 The allocation of the total consideration transferred to the assets acquired, including intangible assets and goodwill, and the liabilities assumed, is preliminary and could be revised as a result of additional information obtained due to the finalization of a third-party valuation report, leases and related commitments, tax related matters and contingencies and certain assets and liabilities, including receivables and payables. Amounts will be finalized within the measurement period, which will not exceed one year from the Acquisition Date. The goodwill resulting from this acquisition is not tax deductible. The following table presents the preliminary allocation of the consideration transferred to the assets acquired and liabilities assumed based on their fair values. Preliminary Total purchase consideration $ 10,517,000 Fair value of non-controlling interest 10,336,000 Total consideration $ 20,853,000 Identifiable net assets acquired: Cash $ 2,278,000 Accounts receivable 9,891,000 Prepaid expenses and other current assets 673,000 Inventories 12,840,000 Property and equipment, net 529,000 Right-of-use assets 1,073,000 Other assets 83,000 Intangible assets: Tradenames (19 year estimated useful life) 2,470,000 Customer relationships (16 year estimated useful life) 1,380,000 Proprietary technology (3 year estimated useful life) 600,000 Accounts payable and accrued expenses (10,052,000 ) Notes payable (2,972,000 ) Lease liabilities (1,124,000 ) Net assets acquired 17,669,000 Goodwill $ 3,184,000 Unaudited Pro Forma Financial Information The following unaudited pro forma consolidated results of operations for the nine months ended September 30, 2022 have been prepared as if the SMC acquisition had occurred on January 1, 2022. Nine Months Ended September 30, 2022 Total revenues $ 131,609,000 Net loss attributable to BitNile Holdings, Inc. $ (62,202,000 ) The unaudited pro forma information is presented for informational purposes only and is not necessarily indicative of the results of operations that would have been achieved had the acquisition been consummated as of that time, nor is it intended to be a projection of future results. Overview of GIGA acquisition On September 8, 2022, Giga-tronics Incorporated (“GIGA”) acquired 100% of the capital stock of GWW from the Company in exchange for 2.92 million shares of GIGA’s common stock and 514.8 shares of GIGA’s Series F Convertible Preferred Stock (“Series F”) that are convertible into an aggregate of 3.96 million shares of GIGA’s common stock. GIGA also assumed GWW’s outstanding equity awards representing the right to receive up to 749,626 shares of GIGA’s common stock, on an as-converted basis. The transaction described above resulted in a change of control of GIGA. Assuming the Company was to convert all of the Series F, the common stock owned by the Company after such conversion would result in the Company owning approximately 71.2% of GIGA’s outstanding shares. On September 8, 2022, the Company loaned GIGA $ 4.25 million The Company believes there are synergies between GIGA and GWW. GIGA manufactures specialized electronics equipment for use in both military test and airborne operational applications. GIGA focuses on the design and manufacture of custom microwave products for military airborne, sea, and ground applications as well as the design and manufacture of high-fidelity signal simulation and recording solutions for RADAR and electronic warfare test applications. GIGA’s results of operations subsequent to the acquisition are included in the Company’s GWW defense business segment. In respect of the above transactions, the acquired assets and assumed liabilities, together with acquired processes and employees, represent a business as defined in ASC 805, Business Combinations. The transactions were accounted for as a reverse acquisition using the acquisition method of accounting with GIGA treated as the legal acquirer and GWW treated as the accounting acquirer. In identifying GWW as the acquiring entity for accounting purposes, GIGA and GWW took into account a number of factors, including the relative voting rights, executive management and the corporate governance structure of the Company. GWW is considered the accounting acquirer since the Company controls the board of directors of GIGA following the transactions and received a 71.2 The fair value of the purchase consideration was $ 9.5 million 4.0 million 0.4 million 3.7 million 1.3 The tradenames and developed technology intangible assets were valued using the relief-from-royalty method. The relief-from-royalty method is one of the methods under the income approach wherein estimates of a company’s earnings attributable to the intangible asset are based on the royalty rate the company would have paid for the use of the asset if it did not own it. Royalty payments are estimated by applying royalty rates between 1.0 7.0 The Company determined an estimated fair value of customer relationships using an income approach utilizing a discounted cash flow methodology. The analysis included assumptions regarding the development of new businesses and organic growth rates, a discount rate of 22% using a weighted average cost of capital analysis, and capital expenditure requirements associated with any new initiatives developed by GIGA. Significant assumptions utilized in the income approach were based on company specific information and projections which are not observable in the market and are therefore considered Level 3 fair value measurements. The total purchase price to acquire GIGA has been allocated to the assets acquired and assumed liabilities based upon preliminary estimated fair values, with any excess purchase price allocated to goodwill. The goodwill resulting from this acquisition is not tax deductible. The fair value of the acquired assets and assumed liabilities as of the date of acquisition are based on preliminary estimates assisted, in part, by a third-party valuation expert. The estimates are subject to change upon the finalization of appraisals and other valuation analyses, which are expected to be completed no later than one year from the date of acquisition. Although the completion of the valuation activities may result in asset and liability fair values that are different from the preliminary estimates included herein, it is not expected that those differences would alter the understanding of the impact of this transaction on the consolidated financial position and results of operations of the Company. The preliminary purchase price allocation is as follows: Preliminary allocation Total purchase consideration $ 6,763,000 Fair value of non-controlling interest 2,735,000 Total consideration $ 9,498,000 Identifiable net assets acquired (liabilities assumed): Cash $ 107,000 Trade accounts receivable 536,000 Inventories 5,180,000 Prepaid expenses 116,000 Accrued revenue 363,000 Property and equipment 331,000 Right-of-use asset 370,000 Other long-term assets 446,000 Intangible assets: Tradename ( 12 1,040,000 Developed Technology ( 8 1,410,000 Existing customer relationships ( 10 15 3,910,000 Accounts payable (2,831,000 ) Loans payable, net of discounts and issuance costs (387,000 ) Accrued payroll and benefits (1,488,000 ) Lease obligations (491,000 ) Other current liabilities (368,000 ) Other non-current liabilities (17,000 ) Net assets acquired 8,227,000 Goodwill $ 1,271,000 |
GOODWILL
GOODWILL | 9 Months Ended |
Sep. 30, 2022 | |
Following Table Summarizes Changes In Companys Goodwill For Nine Months Ended September 30 2022 | |
GOODWILL | 9. GOODWILL The following table summarizes the changes in the Company’s goodwill for the nine months ended September 30, 2022: Goodwill Balance as of January 1, 2022 $ 10,090,000 Acquisition of AVLP 40,890,000 Acquisition of SMC 3,184,000 Acquisition of GIGA 1,271,000 Effect of exchange rate changes (891,000 ) Balance as of September 30, 2022 $ 54,544,000 |
INCREASE IN OWNERSHIP INTEREST
INCREASE IN OWNERSHIP INTEREST OF SUBSIDIARIES | 9 Months Ended |
Sep. 30, 2022 | |
Noncontrolling Interest [Abstract] | |
INCREASE IN OWNERSHIP INTEREST OF SUBSIDIARIES | 10. INCREASE IN OWNERSHIP INTEREST OF SUBSIDIARIES On May 12, 2022, BNI closed a $ 1.8 30 Between June 15, 2022 and September 30, 2022, Ault Lending increased the Company’s ownership interest in SMC through the open market purchase of approximately 274,000 2.1 |
INVESTMENTS _ RELATED PARTIES
INVESTMENTS – RELATED PARTIES | 9 Months Ended |
Sep. 30, 2022 | |
Investments Related Parties | |
INVESTMENTS – RELATED PARTIES | 11. INVESTMENTS – RELATED PARTIES Investments in Alzamend and Ault & Company at September 30, 2022 and December 31, 2021, were comprised of the following: Investment in Promissory Notes, Related Parties Interest Due September 30, December 31, rate date 2022 2021 Investment in promissory note of Ault & Company 8 December 31, 2022 $ 2,500,000 $ 2,500,000 Accrued interest receivable, Ault & Company 318,000 170,000 Other - 172,000 Total investment in promissory note, related party $ 2,818,000 $ 2,842,000 Investment in Common Stock and Options, Related Parties September 30, December 31, 2022 2021 Investment in common stock and options of Alzamend $ 12,394,000 $ 13,230,000 The following table summarizes the changes in the Company’s investments in Alzamend and Ault & Company during the nine months ended September 30, 2022: Investment in Investment in Balance at January 1, 2022 $ 13,230,000 $ 2,842,000 Investment in common stock and options of Alzamend 4,840,000 - Unrealized loss in common stock of Alzamend (5,676,000 ) - Amortization of related party investment - (173,000 ) Accrued interest - 149,000 Balance at September 30, 2022 $ 12,394,000 $ 2,818,000 Investments in Alzamend Common Stock The following table summarizes the changes in the Company’s investments in Alzamend common stock during the nine months ended September 30, 2022: Shares of Per Share Investment in Common Stock Price Common Stock Balance at January 1, 2022 6,947,000 $ 1.90 $ 13,230,000 March 9, 2021 securities purchase agreement * 2,667,000 $ 1.50 4,000,000 Open market purchases after initial public offering 801,000 $ 1.05 840,000 Unrealized loss in common stock of Alzamend (5,676,000 ) Balance at September 30, 2022 10,415,000 $ 1.19 $ 12,394,000 * Pursuant to the March 9, 2021 securities purchase agreement, in aggregate, Alzamend agreed to sell up to 6,666,667 shares of its common stock to Ault Lending for $10.0 million, or $1.50 per share, and issue to Ault Lending warrants to acquire 3,333,334 shares of Alzamend common stock with an exercise price of $3.00 per share. As of December 31, 2021, Ault Lending funded $6.0 million, including the conversion of notes and advances of $0.8 million, and the remaining $4.0 million was funded upon Alzamend achieving certain milestones during the nine months ended September 30, 2022. |
INVESTMENT IN UNCONSOLIDATED EN
INVESTMENT IN UNCONSOLIDATED ENTITY – AVLP | 9 Months Ended |
Sep. 30, 2022 | |
Investment In Unconsolidated Entity Avlp | |
INVESTMENT IN UNCONSOLIDATED ENTITY – AVLP | 12. INVESTMENT IN UNCONSOLIDATED ENTITY – AVLP Equity Investments in Unconsolidated Entity – AVLP The Company converted its AVLP convertible promissory note on June 1, 2022 as part of the acquisition of AVLP (see Note 8). Equity investments in the then unconsolidated entity, AVLP, at December 31, 2021, were comprised of the following: Investment in Promissory Notes Interest rate Due date December 31, 2021 Investment in convertible promissory note 12 2022-2026 $ 17,799,000 Investment in promissory note – Alpha Fund 8 June 30, 2022 3,600,000 Accrued interest receivable 2,092,000 Other 600,000 Total investment in promissory notes, gross 24,091,000 Less: provision for loan losses (2,000,000 ) Total investment in promissory note $ 22,091,000 The following table summarizes the changes in the Company’s equity investments in the then unconsolidated entity, AVLP, during the nine months ended September 30, 2022: Investment in Investment in warrants and promissory notes Total common stock and advances investment Balance at January 1, 2022 $ 39,000 $ 22,091,000 $ 22,130,000 Investment in convertible promissory notes - 2,200,000 2,200,000 Loss from equity investment (39,000 ) (885,000 ) (924,000 ) Accrued interest - 143,000 143,000 Loss on remeasurement upon conversion - (2,700,000 ) (2,700,000 ) Conversion of AVLP convertible promissory notes - (17,040,000 ) (17,040,000 ) Elimination of intercompany debt after conversion - (3,809,000 ) (3,809,000 ) Balance at September 30, 2022 $ - $ - $ - |
CONSOLIDATED VARIABLE INTEREST
CONSOLIDATED VARIABLE INTEREST ENTITY - ALPHA FUND | 9 Months Ended |
Sep. 30, 2022 | |
Consolidated Variable Interest Entity - Alpha Fund | |
CONSOLIDATED VARIABLE INTEREST ENTITY - ALPHA FUND | 13. CONSOLIDATED VARIABLE INTEREST ENTITY - ALPHA FUND Alpha Fund – Consolidated Variable Interest Entity As of September 30, 2022 and December 31, 2021, the Company held an investment in Ault Alpha LP (“Alpha Fund”). Alpha Fund operates as a private investment fund. The general partner of Alpha Fund, Ault Alpha GP LLC (“Alpha GP”) is owned by Ault Capital Management LLC (the “Investment Manager”), which also acts as the investment manager to Alpha Fund. The Investment Manager is owned by Ault & Company. Messrs. Ault, Horne, Nisser and Cragun, who serve as executive officers and/or directors of the Company, are executive officers of the Investment Manager, and Messrs. Ault, Horne and Nisser are executive officers and directors of Ault & Company. As of September 30, 2022, Ault Lending subscribed for $ 33 100 16 17 The Company consolidates Alpha Fund as a variable interest entity (a “VIE”) due to its significant level of influence and control of Alpha Fund, the size of its investment, and its ability to participate in policy making decisions, the Company is considered the primary beneficiary of the VIE. Investments by Alpha Fund – Treasury Stock As of September 30, 2022, Alpha Fund owned 45,049,871 91,033 13.00 |
ACCOUNTS PAYABLE AND ACCRUED EX
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | 9 Months Ended |
Sep. 30, 2022 | |
Payables and Accruals [Abstract] | |
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | 14. ACCOUNTS PAYABLE AND ACCRUED EXPENSES Other current liabilities at September 30, 2022 and December 31, 2021 consisted of: Schedule of other current liabilities September 30, December 31, 2022 2021 Accounts payable 22,467,000 $ 6,902,000 Accrued payroll and payroll taxes 9,531,000 5,027,000 Financial instrument liabilities 937,000 4,249,000 Accrued legal 1,787,000 2,637,000 Interest payable 4,140,000 187,000 Other accrued expenses 11,745,000 3,753,000 Total $ 50,607,000 $ 22,755,000 Financial Instruments Under authoritative guidance used by the FASB on determining whether an instrument (or embedded feature) is indexed to an entity’s own stock, instruments that do not have fixed settlement provisions are deemed to be derivative instruments. In prior years, the Company granted certain warrants that resulted in these warrants accounted for as a financial instrument and being re-measured every reporting period with the change in value reported in the statement of operations. The financial instruments were valued using a variety of pricing models with the following valuation assumptions: Schedule of Financial Instrument September 30, December 31, Contractually stipulated stock price $ 2.50 $ 2.50 Exercise price $ 2.50 $ 2.50 Contractually defined remaining term 5.0 5.0 Contractually defined volatility 135 % 135 % Dividend yield 0 % 0 % Risk-free interest rate 4.1 % 1.3 % Per the terms of the warrant agreements underlying the financial instruments, the value to the warrant holders is defined within the agreement based on a stock price, contractual term, volatility factor and dividend rate as defined in the warrant agreement, and not indexed to the company’s stock, resulting in the financial instrument accounting. The risk-free interest rate was based on rates established by the Federal Reserve Bank. The following table sets forth a summary of the changes in the estimated fair value of the financial instruments during the nine months ended September 30, 2022 and 2021: Schedule of fair value of the financial instruments September 30, 2022 September 30, 2021 Beginning balance $ 4,249,000 $ 4,192,000 Change in fair value 27,000 388,000 Extinguishment (3,339,000 ) - Ending balance $ 937,000 $ 4,580,000 |
NOTES PAYABLE
NOTES PAYABLE | 9 Months Ended |
Sep. 30, 2022 | |
Notes Payable | |
NOTES PAYABLE | 15. NOTES PAYABLE Notes payable at September 30, 2022 and December 31, 2021, were comprised of the following: Schedule of notes payable Interest Due date September 30, December 31, Short-term notes payable 12.0% Nov. 2022 $ 35,000 $ 118,000 10% original issue discount senior secured notes - 65,972,000 AGREE Madison secured construction loans 7.0% January 1, 2025 58,351,000 55,055,000 SMC line of credit 15.5% June 11, 2023 2,500,000 - SMC installment notes 7.6% June 18, 2024 177,000 - SMC notes payable 6.0% Sept. 2024-Feb. 2025 353,000 - XBTO note payable 12.5% December 30, 2023 3,384,000 - 10% secured promissory notes 10.0% August 10, 2023 10,093,000 - Short-term bank line of credit 4.7% Renews monthly 2,325,000 960,000 Total notes payable $ 77,218,000 $ 122,105,000 Less: Unamortized debt discounts (1,776,000 ) (27,496,000 ) Total notes payable, net $ 75,442,000 $ 94,609,000 Less: current portion (17,132,000 ) (39,554,000 ) Notes payable – long-term portion $ 58,310,000 $ 55,055,000 10% Secured Promissory Notes On August 10, 2022, the Company, through its BNI subsidiary, entered into a note purchase agreement providing for the issuance of secured promissory notes with an aggregate principal face amount of $ 11,000,000 10 10.0 10 23.1 The maturity date of the secured promissory notes is August 10, 2023. The Company is required to make monthly payment (principal and interest) of $1,000,000 on the tenth calendar day of each month, starting in September 2022. Provided that the Company makes the first six monthly payments in full and on a timely basis, after six months, the Company may elect to pay a forbearance fee of $250,000 in lieu of a monthly payment, which would extend the maturity date of the related secured promissory notes by one month for each forbearance. The Company may not elect forbearance in consecutive months. SMC Debt Security Interest The SMC debt is secured by a perfected security interest in all SMC assets including a first-priority security interest in SMC accounts receivable and inventory. Amortization of Debt Discount of Secured Promissory Notes During the three months ended March 31, 2022, the $ 66 26.3 million The following table summarizes the principal maturity schedule for our notes payable outstanding as of September 30, 2022: Year Principal 2022 $ 18,049,000 2023 818,000 2024 - 2025 58,351,000 Total $ 77,218,000 |
CONVERTIBLE NOTES
CONVERTIBLE NOTES | 9 Months Ended |
Sep. 30, 2022 | |
Convertible Notes | |
CONVERTIBLE NOTES | 16. CONVERTIBLE NOTES Convertible notes payable at September 30, 2022 and December 31, 2021, were comprised of the following: Conversion price per Interest rate Due date September 30, December 31, Convertible promissory note $ 4.00 4 May 10, 2024 $ 660,000 $ 660,000 AVLP convertible promissory notes $ 0.35 15 August 22, 2025 9,911,000 - Fair value of embedded options and derivatives 4,908,000 - Less: unamortized debt discounts (132,000 ) (192,000 ) Total convertible notes payable, net of financing cost $ 15,347,000 $ 468,000 Less: current portion (1,469,000 ) - Total convertible notes payable, net of financing cost, long term $ 13,878,000 $ 468,000 AVLP convertible promissory notes The AVLP convertible notes payable are due and payable on August 22, 2025, with interest at 7 (i) if the aggregate market capital of AVLP on the date of conversion (the “Market Cap”) is $35 million or less, at a 25% discount to the market price, or (ii) if the Market Cap is greater than $35 million, at a 25% discount to the market price, provided that such discount shall be increased by dividing it by the quotient that shall be obtained by dividing $35 million by the Market Cap at the time of conversion, provided, however, any increase in the discount to the market price shall not result in a discount that is greater than a 75% discount (the “Conversion Price”). Notwithstanding the foregoing, in no event shall the Conversion Price be less than $0.35. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 17. COMMITMENTS AND CONTINGENCIES Blockchain Mining Supply and Services, Ltd. On November 28, 2018, Blockchain Mining Supply and Services, Ltd. (“Blockchain Mining”) a vendor who sold computers to one of the Company’s subsidiaries, filed a Complaint (the “Complaint”) in the United States District Court for the Southern District of New York against the Company and the Company’s subsidiary, Digital Farms, Inc. (f/k/a Super Crypto Mining, Inc.), in an action captioned Blockchain Mining Supply and Services, Ltd. v. Super Crypto Mining, Inc. and DPW Holdings, Inc. The Complaint asserts claims for breach of contract and promissory estoppel against the Company and its subsidiary arising from the subsidiary’s alleged failure to honor its obligations under the purchase agreement. The Complaint seeks monetary damages in excess of $ 1,388,495 The Company intends to vigorously defend against the claims asserted against it in this action. On April 13, 2020, the Company and its subsidiary, jointly filed a motion to dismiss the Complaint in its entirety as against the Company, and the promissory estoppel claim as against its subsidiary. On the same day, the Company’s subsidiary also filed a partial Answer to the Complaint in connection with the breach of contract claim. On April 29, 2020, Blockchain Mining filed an amended complaint (the “Amended Complaint”). The Amended Complaint asserts the same causes of action and seeks the same damages as the initial Complaint. On May 13, 2020, the Company and its subsidiary, jointly filed a motion to dismiss the Amended Complaint in its entirety as against the Company, and the promissory estoppel claim as against of its subsidiary. On the same day, the Company’s subsidiary also filed a partial Answer to the Amended Complaint in connection with the breach of contract claim. In its partial Answer, the Company’s subsidiary admitted to the validity of the contract at issue and also asserted numerous affirmative defenses concerning the proper calculation of damages. On December 4, 2020, the Court issued an Order directing the parties to engage in limited discovery to be completed by March 4, 2021. In connection therewith, the Court also denied the defendants’ motion to dismiss without prejudice. On June 2, 2021, the Company and its subsidiary filed a motion to dismiss the Amended Complaint in its entirety as against the Company, and the promissory estoppel claim as against the subsidiary. On August 8, 2022, the Court issued an Order denying the motion to dismiss, in its entirety. On September 2, 2022, the Company and its subsidiary filed an answer to the Amended Complaint and asserted numerous affirmative defenses. Based on the Company’s assessment of the facts underlying the claims, the uncertainty of litigation, and the preliminary stage of the case, the Company cannot reasonably estimate the potential loss or range of loss that may result from this action. Notwithstanding, the Company has established a reserve in the amount of the unpaid portion of the purchase agreement, which is included in accounts payable and accrued expenses. An unfavorable outcome may have a material adverse effect on the Company’s business, financial condition and results of operations. Ding Gu (a/k/a Frank Gu) and Xiaodan Wang Litigation On January 17, 2020, Ding Gu (a/k/a Frank Gu) (“Gu”) and Xiaodan Wang (“Wang” and with “Gu” collectively, “Plaintiffs”), filed a Complaint (the “Complaint”) in the Supreme Court of the State of New York, County of New York against the Company and the Company’s Chief Executive Officer, Milton C. Ault, III, in an action captioned Ding Gu (a/k/a Frank Gu) and Xiaodan Wang v. DPW Holdings, Inc. and Milton C. Ault III (a/k/a Milton Todd Ault III a/k/a Todd Ault) The Complaint asserts causes of action for declaratory judgment, specific performance, breach of contract, conversion, attorneys’ fees, permanent injunction, enforcement of Guaranty, unjust enrichment, money had and received, and fraud arising from: (i) a series of transactions entered into between Gu and the Company, as well as Gu and Ault, in or about May 2019; and (ii) a term sheet entered into between Plaintiffs and the Company, in or about July 2019. The Complaint seeks, among other things, monetary damages in excess of $ 1.1 million The Company intends to vigorously defend against the claims asserted against it in this action. On May 4, 2020, the Company and Ault jointly filed a motion to dismiss the Complaint in its entirety, with prejudice. On July 28, 2021, the Court conducted oral argument in connection with the motion to dismiss. During the oral argument, the Court informed the parties that the Court was dismissing the fraud claim, in its entirety, and provided Plaintiffs an opportunity to amend their fraud claim within sixty days of the date of the oral argument. The Court reserved decision on the other causes of action. On December 14, 2021, the Court entered a decision and order in connection with the motion to dismiss whereby the Court dismissed Plaintiff’s causes of action for specific performance, conversion, permanent injunction, and reiterated its prior determination that the fraud claim was also dismissed. The Court denied the motion to dismiss in connection with the other causes of action asserted in the complaint. On January 26, 2022, the Company and Mr. Ault filed an answer to the complaint and asserted numerous affirmative defenses. On November 1, 2022, the parties informed the Court that they reached a settlement in principle and requested an extension of time, until November 22, 2022, to file motions for summary judgment to allow the parties time to draft formal settlement documents. The Court granted the parties’ request and the deadline for the Company and Mr. Ault to file their summary judgment is November 22, 2022. Based on the terms of the settlement in principle, the Company believes its current legal accrual is adequate to cover the cost of settlement. Subpoena The Company and certain affiliates and related parties have received several subpoenas from the SEC for the production of documents and testimony. The Company is fully cooperating with this non-public, fact-finding inquiry and management believes that the Company has operated its business in compliance with all applicable laws. The subpoenas expressly provide that the inquiry is not to be construed as an indication by the SEC or its staff that any violations of the federal securities laws have occurred, nor should they be considered a reflection upon any person, entity or security. However, there can be no assurance as to the outcome of this matter. Other Litigation Matters The Company is involved in litigation arising from other matters in the ordinary course of business. The Company is regularly subject to claims, suits, regulatory and government investigations, and other proceedings involving labor and employment, commercial disputes, and other matters. Such claims, suits, regulatory and government investigations, and other proceedings could result in fines, civil penalties, or other adverse consequences. Certain of these outstanding matters include speculative, substantial or indeterminate monetary amounts. The Company records a liability when it believes that it is probable that a loss has been incurred and the amount can be reasonably estimated. If the Company determines that a loss is reasonably possible and the loss or range of loss can be estimated, the Company discloses the reasonably possible loss. The Company evaluates developments in its legal matters that could affect the amount of liability that has been previously accrued, and the matters and related reasonably possible losses disclosed, and makes adjustments as appropriate. Significant judgment is required to determine both likelihood of there being and the estimated amount of a loss related to such matters. With respect to the Company’s other outstanding matters, based on the Company’s current knowledge, the Company believes that the amount or range of reasonably possible loss will not, either individually or in aggregate, have a material adverse effect on the Company’s business, consolidated financial position, results of operations, or cash flows. However, the outcome of such matters is inherently unpredictable and subject to significant uncertainties. |
STOCKHOLDERS_ EQUITY
STOCKHOLDERS’ EQUITY | 9 Months Ended |
Sep. 30, 2022 | |
Equity [Abstract] | |
STOCKHOLDERS’ EQUITY | 18. STOCKHOLDERS’ EQUITY 2022 Issuances 2022 ATM Offering – Common Stock On February 25, 2022, the Company entered into an At-The-Market issuance sales agreement with Ascendiant Capital Markets, LLC (“Ascendiant Capital”) to sell shares of common stock having an aggregate offering price of up to $ 200 256.7 million 168.0 million Public Offering of Series D Preferred Stock The Company has designated 2,000,000 On June 3, 2022, the Company announced the closing of its public offering of 144,000 25.00 3.6 3.1 2022 ATM Offering – Preferred Stock On June 14, 2022, the Company entered into an At-The-Market equity offering program with Ascendiant Capital under which it may sell, from time to time, shares of its Series D Preferred Stock for aggregate gross proceeds of up to $ 46,400,000 10,928 207,000 |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | 19. INCOME TAXES The Company calculates its interim income tax provision in accordance with ASC Topic 270, Interim Reporting, and ASC Topic 740, Income Taxes. The Company’s effective tax rate (“ETR”) from continuing operations was 0.6 (9.1%) 0.4 million 0.1 million 21 |
NET (LOSS) INCOME PER SHARE
NET (LOSS) INCOME PER SHARE | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
NET (LOSS) INCOME PER SHARE | 20. NET (LOSS) INCOME 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 BitNile 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 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, 2022 and 2021: Net Loss Per Share September 30, 2022 2021 Stock options 6,396,000 4,761,000 Restricted stock grants 2,085,000 - Warrants 18,493,000 5,936,000 Convertible notes 165,000 165,000 Convertible preferred stock 2,000 2,000 Total 27,141,000 10,864,000 |
SEGMENT AND CUSTOMERS INFORMATI
SEGMENT AND CUSTOMERS INFORMATION | 9 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
SEGMENT AND CUSTOMERS INFORMATION | 21. SEGMENT AND CUSTOMERS INFORMATION The Company had seven five The following data presents the revenues, expenditures and other operating data of the Company’s operating segments for the three and nine months ended September 30, 2022: Nine Months Ended September 30, 2022 GWW TurnOn Green Ault BNI AGREE Ault SMC Holding Total Revenue $ 21,530,000 $ 3,853,000 $ 220,000 $ - $ - $ - $ 17,114,000 $ - $ 42,717,000 Revenue, cryptocurrency mining - - - 11,398,000 - - - - 11,398,000 Revenue, commercial real estate leases - - - 822,000 - - - - 822,000 Revenue, lending and trading activities - - 32,224,000 - - - - - 32,224,000 Revenue, hotel operations - - - - 12,809,000 - - - 12,809,000 Total revenues $ 21,530,000 $ 3,853,000 $ 32,444,000 $ 12,220,000 $ 12,809,000 $ - $ 17,114,000 $ - $ 99,970,000 Depreciation and amortization expense $ 1,259,000 $ 403,000 $ 240,000 $ 6,949,000 $ 2,487,000 $ - $ 166,000 $ 473,000 $ 11,977,000 Income (loss) from operations $ (1,881,000 ) $ (2,577,000 ) $ 4,212,000 $ (6,138,000 ) $ 149,000 $ (1,100,000 ) $ 597,000 $ (19,262,000 ) $ (26,000,000 ) Capital expenditures for the nine $ 612,000 $ 176,000 $ 1,739,000 $ 77,299,000 $ 4,444,000 $ - $ 66,000 $ 164,000 $ 84,500,000 Three Months Ended September 30, 2022 GWW TurnOn Green Ault BNI AGREE Ault SMC Holding Total Revenue $ 7,781,000 $ 1,662,000 $ 201,000 $ - $ - $ - $ 17,114,000 $ - $ 26,758,000 Revenue, cryptocurrency mining - - - 3,874,000 - - - - 3,874,000 Revenue, commercial real estate leases - - - 273,000 - - - - 273,000 Revenue, lending and trading activities - - 13,360,000 - - - - - 13,360,000 Revenue, hotel operations - - - - 5,513,000 - - - 5,513,000 Total revenues $ 7,781,000 $ 1,662,000 $ 13,561,000 $ 4,147,000 $ 5,513,000 $ - $ 17,114,000 $ - $ 49,778,000 Depreciation and amortization expense $ 740,000 $ 393,000 $ 172,000 $ 2,809,000 $ 832,000 $ - $ 166,000 $ (264,000 ) $ 4,848,000 Income (loss) from operations $ (661,000 ) $ (957,000 ) $ 3,786,000 $ (2,321,000 ) $ 1,697,000 $ (314,000 ) $ 597,000 $ (5,138,000 ) $ (3,311,000 ) Capital expenditures for the three $ 327,000 $ 51,000 $ 890,000 $ 5,915,000 $ 4,425,000 $ - $ 66,000 $ 47,000 $ 11,721,000 AVLP, SMC and GIGA Segment Information The AVLP and SMC acquisitions were completed in June 2022 and the GIGA acquisition was completed in September 2022. As of September 30, 2022, identifiable assets for AVLP, SMC and GIGA were $ 47.5 million 40.0 million 19.2 million Segment information for the three and nine months ended September 30, 2021: Nine Months Ended September 30, 2021 GWW TurnOnGreen Ault BNI Ault Holding Total Revenue $ 19,198,000 $ 4,308,000 $ 236,000 $ 23,742,000 Revenue, cryptocurrency mining - - 693,000 693,000 Revenue, commercial real estate leases - - 530,000 530,000 Revenue, lending and trading activities - - 19,615,000 19,615,000 Revenue, hotel operations - - - Total revenues $ 19,198,000 $ 4,308,000 $ 19,851,000 $ 1,223,000 $ - $ - $ 44,580,000 Depreciation and amortization expense $ 951,000 $ 69,000 $ 146,000 $ 250,000 $ - $ 297,000 $ 1,713,000 Income (loss) from operations $ (766,000 ) $ (490,000 ) $ 12,390,000 $ (839,000 ) $ (331,000 ) $ (12,814,000 ) $ (2,850,000 ) Capital expenditures for the nine $ 686,000 $ - $ - $ 27,459,000 $ - $ - $ 28,145,000 Three Months Ended September 30, 2021 GWW TurnOn Green Ault BNI Ault Holding Total Revenue $ 6,373,000 $ 1,094,000 $ 110,000 $ - $ - $ - $ 7,577,000 Revenue, cryptocurrency mining - - - 272,000 - - 272,000 Revenue, commercial real estate leases - - - 226,000 - - 226,000 Revenue, lending and trading activities - - (38,869,000 ) - - - (38,869,000 ) Revenue, hotel operations - - - - - - - Total revenues $ 6,373,000 $ 1,094,000 $ (38,759,000 ) $ 498,000 $ - $ - $ (30,794,000 ) Depreciation and amortization expense $ 523,000 $ 56,000 $ 118,000 $ 98,000 $ - $ 281,000 $ 1,076,000 Income (loss) from operations $ 19,000 $ (408,000 ) $ (41,390,000 ) $ (339,000 ) $ (143,000 ) $ (7,613,000 ) $ (49,874,000 ) Capital expenditures for the three $ 120,000 $ - $ 22,435,000 $ - $ - $ 22,555,000 |
CONCENTRATIONS OF CREDIT AND RE
CONCENTRATIONS OF CREDIT AND REVENUE RISK | 9 Months Ended |
Sep. 30, 2022 | |
Risks and Uncertainties [Abstract] | |
CONCENTRATIONS OF CREDIT AND REVENUE RISK | 22. CONCENTRATIONS OF CREDIT AND REVENUE RISK Accounts receivable are concentrated with certain large customers. At September 30, 2022, approximately 36 10 For the three months ended September 30, 2022, one customer represented 15 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2022 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | 23. SUBSEQUENT EVENTS 2022 Common ATM Offering During the period between October 1, 2022 through November 18, 2022, the Company sold an aggregate of 14.8 2.6 2022 Preferred ATM Offering During the period between October 1, 2022 through November 18, 2022, the Company sold an aggregate of 8,933 124,000 Investments in Alpha Fund During the period between October 1, 2022 through November 18, 2022, Ault Lending purchased an additional SMC Credit and Security Agreement with Fifth Third Bank On October 14, 2022, SMC entered into a credit agreement with Fifth Third Bank. The credit agreement provides for a three-year secured revolving credit facility in an aggregate principal amount of up to $15 million decreased to $7.5 million during the non-peak period of January 1 through July 31 of each year. The credit agreement matures on October 14, 2025. The revolving credit facility bears interest of the Prime Rate plus 0.50 3.00 Under the credit agreement: · Accounts receivable advance rate up to an 85 · Inventory advance of up to 85 · SMC must maintain a minimum fixed charge coverage of 1.05 to 1. Availability under the credit agreement was approximately $ 4.0 Secured Debt Financing On November 7, 2022, the Company and certain of its subsidiaries borrowed $18.9 million of principal amount of term loans (the “Loans”) from a group of institutional investors (the “Financing”). The Loans mature in 18 months, which may be extended to 24 months, accrue interest at the rate of 8.5% per annum and are secured by certain assets of the Company and various subsidiaries. Starting in January 2023, the lenders have the right to require the Company to make monthly payments of $0.6 million, which will increase to $1.1 million in November 2023. The Loans were issued with an original issue discount of $1.89 million. The lenders received warrants to purchase approximately 4.5 0.45 4.5 0.75 On November 7, 2022, Ault Aviation used proceeds from the Loans to purchase a private aircraft for a total purchase price of $ 15.8 3% Secured Promissory Notes On November 18, 2022, the Company, through its BNI subsidiary, entered into a note purchase agreement providing for the issuance of secured promissory notes with an aggregate principal face amount of $ 8,181,819 3 8.2 The maturity date of the secured promissory notes is May 18, 2023. When the Company sells the Collateral, the Company is required to make a payment towards the secured promissory notes equal to 45% of the realized gains. After the secured promissory notes have been repaid in full and until all of the Collateral is sold, when the Company sells any remaining Collateral, the Company is required to give the investors a profits participation interest equal to 45% of the realized gains. Amendment to 10% Secured Promissory Notes On November 18, 2022, the Company’s BNI subsidiary entered into an amendment to the 10% secured promissory notes issued on August 10, 2022, whereby the investors permitted the Company to (i) elect to utilize one of the six monthly forbearances under the notes for the November 2022 monthly payment and (ii) make the forbearance payment with the December 2022 monthly payment. |
BASIS OF PRESENTATION AND SIG_2
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Significant Accounting Policies Other than as noted below, there have been no material changes to the Company’s significant accounting policies previously disclosed in the 2021 Annual Report. |
Business Combination | Business Combination The Company allocates the purchase price of an acquired business to the tangible and intangible assets acquired and liabilities assumed based upon their estimated fair values on the acquisition date. Any excess of the purchase price over the fair value of the net assets acquired is recorded as goodwill. The purchase price allocation process requires management to make significant estimates and assumptions at the acquisition date with respect to intangible assets. The allocation of the consideration transferred in certain cases may be subject to revision based on the final determination of fair values during the measurement period, which may be up to one year from the acquisition date. Direct transaction costs associated with the business combination are expensed as incurred. The Company includes the results of operations of the business that it has acquired in its consolidated results prospectively from the date of acquisition. If the business combination is achieved in stages, the acquisition date carrying value of the acquirer’s previously held equity interest in the acquirer is re-measured to fair value at the acquisition date; any gains or losses arising from such re-measurement are recognized in profit or loss. |
Oil and Gas Properties | Oil and Gas Properties The Company uses the successful efforts method of accounting for oil and natural gas producing properties, as further defined under Accounting Standards Codification (“ASC”) 932, Extractive Activities - Oil and Natural Gas. Under this method, costs to acquire mineral interests in oil and natural gas properties are capitalized. The costs of non-producing mineral interests and associated acquisition costs are capitalized as unproved properties pending the results of leasing efforts and drilling activities of exploration and production (“E&P”) operators on our interests. As unproved properties are determined to have proved reserves, the related costs are transferred to proved oil and gas properties. Capitalized costs for proved oil and natural gas mineral interests are depleted on a unit-of-production basis over total proved reserves. For depletion of proved oil and gas properties, interests are grouped in a reasonable aggregation of properties with common geological structural features or stratigraphic conditions. |
Impairment of Oil and Gas Properties | Impairment of Oil and Gas Properties The Company evaluates its producing properties for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. When assessing proved properties for impairment, the Company compares the expected undiscounted future cash flows of the proved properties to the carrying amount of the proved properties to determine recoverability. If the carrying amount of proved properties exceeds the expected undiscounted future cash flows, the carrying amount is written down to the properties’ estimated fair value, which is measured as the present value of the expected future cash flows of such properties. The factors used to determine fair value include estimates of proved reserves, future commodity prices, timing of future production, and a risk-adjusted discount rate. The proved property impairment test is primarily impacted by future commodity prices, changes in estimated reserve quantities, estimates of future production, overall proved property balances, and depletion expense. If pricing conditions decline or are depressed, or if there is a negative impact on one or more of the other components of the calculation, we may incur proved property impairments in future periods. Unproved oil and gas properties are assessed periodically for impairment of value, and a loss is recognized at the time of impairment by charging capitalized costs to expense. Impairment is assessed when facts and circumstances indicate that the carrying value may not be recoverable, at which point an impairment loss is recognized to the extent the carrying value exceeds the estimated recoverable value. Factors used in the assessment include but are not limited to commodity price outlooks and current and future operator activity in the respective basins. The Company recognized no impairment of unproved properties for the three and nine months ended September 30, 2022 and 2021. |
Reclassifications | Reclassifications Certain prior period amounts have been reclassified for comparative purposes to conform to the current-period financial statement presentation. These reclassifications had no effect on previously reported results of operations. |
Recently Adopted Accounting Standards | Recently Adopted Accounting Standards In May 2021, the Financial Accountings Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2021-04, “Earnings Per Share (Topic 260), Debt-Modifications and Extinguishments (Subtopic 470-50), Compensation-Stock Compensation (Topic 718), and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815- 40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options.” The guidance became effective for the Company on January 1, 2022. The Company adopted the guidance on January 1, 2022, and has concluded the adoption did not have a material impact on its unaudited condensed consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments - Credit Losses,” (“ASU No. 2016-13”) to improve information on credit losses for financial assets and net investment in leases that are not accounted for at fair value through net income. ASU 2016-13 replaces the current incurred loss impairment methodology with a methodology that reflects expected credit losses. This guidance is effective for the Company beginning on January 1, 2023, with early adoption permitted. The Company does not expect that the adoption of this standard will have a significant impact on its condensed consolidated financial statements. In August 2020, the FASB issued ASU 2020-06, “Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40)-Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity” (“ASU 2020-06”). The ASU simplifies accounting for convertible instruments by removing major separation models required under current GAAP. Consequently, more convertible debt instruments will be reported as a single liability instrument with no separate accounting for embedded conversion features. ASU 2020-06 removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception, which will permit more equity contracts to qualify for it. ASU 2020-06 also simplifies the diluted net income per share calculation in certain areas. The amendments in ASU 2020-06 are effective for smaller reporting companies as defined by the SEC, for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Effective January 1, 2022, the Company early adopted ASU 2020-06 using the modified retrospective approach, which resulted in no impact on its condensed consolidated financial statements. In October 2021, the FASB issued ASU 2021-08, “Business Combinations (Topic 805), Accounting for Contract Assets and Contract Liabilities from Contracts with Customers,” which requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606, “Revenue from Contracts with Customers.” The guidance will result in the acquirer recognizing contract assets and contract liabilities at the same amounts recorded by the acquiree. The guidance should be applied prospectively to acquisitions occurring on or after the effective date. The guidance is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption is permitted, including in interim periods, for any financial statements that have not yet been issued. The Company is currently evaluating this guidance to determine the impact it may have on its condensed consolidated financial statements. |
REVENUE DISAGGREGATION (Tables)
REVENUE DISAGGREGATION (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
The Company’s disaggregated revenues consisted of the following for the three months ended September 30, 2022: | The Company’s disaggregated revenues consisted of the following for the three months ended September 30, 2022: Three months ended September 30, 2022 GWW TurnOn Green Ault SMC BNI AGREE Total Primary Geographical Markets North America $ 2,472,000 $ 1,428,000 $ - $ 16,138,000 $ 4,146,000 $ 5,513,000 $ 29,697,000 Europe 2,288,000 32,000 201,000 306,000 - - 2,827,000 Middle East and other 3,022,000 202,000 - 670,000 - - 3,894,000 Revenue from contracts with customers 7,782,000 1,662,000 201,000 17,114,000 4,146,000 5,513,000 36,418,000 Revenue, lending and trading activities - - 13,360,000 - - - 13,360,000 Total revenue $ 7,782,000 $ 1,662,000 $ 13,561,000 $ 17,114,000 $ 4,146,000 $ 5,513,000 $ 49,778,000 Major Goods or Services Power supply units $ 2,799,000 $ 1,480,000 $ - $ - $ - $ - $ 4,279,000 Digital currency mining, net - - - - 3,874,000 - 3,874,000 Hotel operations - - - - - 5,513,000 5,513,000 Karaoke machines and related - - - 17,114,000 - - 17,114,000 Other 4,983,000 182,000 201,000 - 272,000 - 5,638,000 Revenue from contracts with customers 7,782,000 1,662,000 201,000 17,114,000 4,146,000 5,513,000 36,418,000 Revenue, lending and trading activities - - 13,360,000 - - - 13,360,000 Total revenue $ 7,782,000 $ 1,662,000 $ 13,561,000 $ 17,114,000 $ 4,146,000 $ 5,513,000 $ 49,778,000 Timing of Revenue Recognition Goods transferred at a point in time $ 5,821,000 $ 1,662,000 $ 201,000 $ 17,114,000 $ 4,146,000 $ 5,513,000 $ 34,457,000 Services transferred over time 1,961,000 - - - - - 1,961,000 Revenue from contracts with customers $ 7,782,000 $ 1,662,000 $ 201,000 $ 17,114,000 $ 4,146,000 $ 5,513,000 $ 36,418,000 The Company’s disaggregated revenues consisted of the following for the nine months ended September 30, 2022: Nine months ended September 30, 2022 GWW TurnOn Green Ault SMC BNI AGREE Total Primary Geographical Markets North America $ 5,094,000 $ 3,262,000 $ 19,000 $ 16,138,000 $ 12,220,000 $ 12,809,000 $ 49,542,000 Europe 7,007,000 79,000 201,000 306,000 - - 7,593,000 Middle East and other 9,429,000 512,000 - 670,000 - - 10,611,000 Revenue from contracts with customers 21,530,000 3,853,000 220,000 17,114,000 12,220,000 12,809,000 67,746,000 Revenue, lending and trading activities - - 32,224,000 - - - 32,224,000 Total revenue $ 21,530,000 $ 3,853,000 $ 32,444,000 $ 17,114,000 $ 12,220,000 $ 12,809,000 $ 99,970,000 Major Goods or Services Power supply units $ 6,928,000 $ 3,592,000 $ - $ - $ - $ - $ 10,520,000 Healthcare diagnostic systems 2,285,000 - - - - - 2,285,000 Defense systems 6,842,000 - - - - - 6,842,000 Digital currency mining - - - - 11,398,000 - 11,398,000 Hotel operations - - - - - 12,809,000 12,809,000 Karaoke machines and related - - - 17,114,000 - - 17,114,000 Other 5,475,000 261,000 220,000 - 822,000 - 6,778,000 Revenue from contracts with customers 21,530,000 3,853,000 220,000 17,114,000 12,220,000 12,809,000 67,746,000 Revenue, lending and trading activities - - 32,224,000 - - - 32,224,000 Total revenue $ 21,530,000 $ 3,853,000 $ 32,444,000 $ 17,114,000 $ 12,220,000 $ 12,809,000 $ 99,970,000 Timing of Revenue Recognition Goods transferred at a point in time $ 12,934,000 $ 3,853,000 $ 220,000 $ 17,114,000 $ 12,220,000 $ 12,809,000 $ 59,150,000 Services transferred over time 8,596,000 - - - - - 8,596,000 Revenue from contracts with customers $ 21,530,000 $ 3,853,000 $ 220,000 $ 17,114,000 $ 12,220,000 $ 12,809,000 $ 67,746,000 The Company’s disaggregated revenues consisted 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 Power supply units $ 1,256,000 $ 1,094,000 $ - $ 2,350,000 Defense systems 2,940,000 - - 2,940,000 Digital currency mining - - 272,000 272,000 Other 2,177,000 - 336,000 2,513,000 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 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 Power supply units $ 1,734,000 $ 4,308,000 $ — $ 6,042,000 Power supply systems 5,253,000 — — 5,253,000 Defense systems 7,731,000 — — 7,731,000 Digital currency mining 693,000 693,000 Other 4,480,000 — 766,000 5,246,000 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 |
FAIR VALUE OF FINANCIAL INSTR_2
FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
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: | 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, 2022 Total Level 1 Level 2 Level 3 Investment in common stock of Alzamend Neuro, Inc. $ 12,394,000 $ 12,394,000 $ - $ - Investments in marketable equity securities 8,561,000 8,561,000 - - Cash and marketable securities held in trust account 117,421,000 117,421,000 - - Investments in other equity securities 3,916,000 - - 3,916,000 Total assets measured at fair value $ 142,292,000 $ 138,376,000 $ - $ 3,916,000 Fair Value Measurement at December 31, 2021 Total Level 1 Level 2 Level 3 Investment in common stock of Alzamend – a related party 13,230,000 13,230,000 - - Investments in marketable equity securities 40,380,000 40,380,000 - - Cash and marketable securities held in trust account 116,725,000 116,725,000 - - Investments in other equity securities 9,215,000 - - 9,215,000 Total assets measured at fair value $ 179,550,000 $ 170,335,000 $ - $ 9,215,000 |
The following table summarizes the changes in investments in other 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, 2022: | The following table summarizes the changes in investments in other 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, 2022: Investments in Balance at January 1, 2022 $ 9,215,000 Investment in preferred stock 6,495,000 Change in fair value of financial instruments 25,850,000 Conversion to marketable securities (37,644,000 ) Balance at September 30, 2022 $ 3,916,000 |
The following table presents information on certain assets measured at fair value on a recurring basis by level within the fair value hierarchy as of September 30, 2022 and December 31, 2021. There were no observable price changes or indicators of impairment for these investments during the nine months ended September 30, 2022. | The following table presents information on certain assets measured at fair value on a recurring basis by level within the fair value hierarchy as of September 30, 2022 and December 31, 2021. There were no observable price changes or indicators of impairment for these investments during the nine months ended September 30, 2022. Fair Value Measurement Using Total Quoted prices Other Significant As of September 30, 2022 Investments in other equity securities that do not report net asset $ 41,641,000 $ - $ - $ 41,641,000 Fair Value Measurement Using Total Quoted prices Other Significant As of December 31, 2021 Investments in other equity securities that do not report net asset $ 21,241,000 $ - $ - $ 21,241,000 |
MARKETABLE EQUITY SECURITIES (T
MARKETABLE EQUITY SECURITIES (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Marketable Equity Securities | |
Marketable equity securities with readily determinable market prices consisted of the following as of September 30, 2022 and December 31, 2021: | Marketable equity securities with readily determinable market prices consisted of the following as of September 30, 2022 and December 31, 2021: Marketable equity securities at September 30, 2022 Gross unrealized Gross unrealized Cost gains losses Fair value Common shares $ 16,182,000 $ 281,000 $ (7,902,000 ) $ 8,561,000 Marketable equity securities at December 31, 2021 Gross unrealized Gross unrealized Cost gains losses Fair value Common shares $ 53,475,000 $ 32,000 $ (13,127,000 ) $ 40,380,000 |
PROPERTY AND EQUIPMENT, NET (Ta
PROPERTY AND EQUIPMENT, NET (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
At September 30, 2022 and December 31, 2021, property and equipment consisted of: | At September 30, 2022 and December 31, 2021, property and equipment consisted of: September 30, 2022 December 31, 2021 Cryptocurrency machines and related equipment $ 131,141,000 $ 10,763,000 Computer, software and related equipment 20,315,000 8,884,000 Office furniture and equipment 2,750,000 702,000 Oil and natural gas properties, unproved properties 972,000 - Land 25,646,000 25,696,000 Building and improvements 76,012,000 68,959,000 256,836,000 115,004,000 Accumulated depreciation and amortization (14,180,000 ) (5,096,000 ) Property and equipment placed in service, net 242,656,000 109,908,000 Deposits on cryptocurrency machines 11,328,000 64,117,000 Property and equipment, net $ 253,984,000 $ 174,025,000 |
Summary of depreciation expense: | Summary of depreciation expense: For the Three Months Ended For the Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Depreciation expense $ 3,942,000 $ 265,000 $ 10,229,000 $ 711,000 |
BUSINESS COMBINATIONS (Tables)
BUSINESS COMBINATIONS (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
The following table presents the final allocation of the consideration transferred to the assets acquired and liabilities assumed based on their fair values. | The following table presents the final allocation of the consideration transferred to the assets acquired and liabilities assumed based on their fair values. Preliminary Total purchase consideration $ 20,706,000 Fair value of non-controlling interest 6,738,000 Total consideration $ 27,444,000 Identifiable net liabilities assumed: Cash $ 1,245,000 Prepaid expenses and other current assets 55,000 Property and equipment 5,057,000 Note receivable 800,000 Accounts payable and accrued expenses (5,018,000 ) Convertible notes payable, principal (9,734,000 ) Fair value of embedded derivative (1,226,000 ) Fair value of bifurcated conversion option (4,425,000 ) Fair value of bifurcated put option (200,000 ) Net liabilities assumed (13,446,000 ) Goodwill $ 40,890,000 |
The following table presents the preliminary allocation of the consideration transferred to the assets acquired and liabilities assumed based on their fair values. | The following table presents the preliminary allocation of the consideration transferred to the assets acquired and liabilities assumed based on their fair values. Preliminary Total purchase consideration $ 10,517,000 Fair value of non-controlling interest 10,336,000 Total consideration $ 20,853,000 Identifiable net assets acquired: Cash $ 2,278,000 Accounts receivable 9,891,000 Prepaid expenses and other current assets 673,000 Inventories 12,840,000 Property and equipment, net 529,000 Right-of-use assets 1,073,000 Other assets 83,000 Intangible assets: Tradenames (19 year estimated useful life) 2,470,000 Customer relationships (16 year estimated useful life) 1,380,000 Proprietary technology (3 year estimated useful life) 600,000 Accounts payable and accrued expenses (10,052,000 ) Notes payable (2,972,000 ) Lease liabilities (1,124,000 ) Net assets acquired 17,669,000 Goodwill $ 3,184,000 |
The following unaudited pro forma consolidated results of operations for the nine months ended September 30, 2022 have been prepared as if the SMC acquisition had occurred on January 1, 2022. | The following unaudited pro forma consolidated results of operations for the nine months ended September 30, 2022 have been prepared as if the SMC acquisition had occurred on January 1, 2022. Nine Months Ended September 30, 2022 Total revenues $ 131,609,000 Net loss attributable to BitNile Holdings, Inc. $ (62,202,000 ) |
The preliminary purchase price allocation is as follows: | The preliminary purchase price allocation is as follows: Preliminary allocation Total purchase consideration $ 6,763,000 Fair value of non-controlling interest 2,735,000 Total consideration $ 9,498,000 Identifiable net assets acquired (liabilities assumed): Cash $ 107,000 Trade accounts receivable 536,000 Inventories 5,180,000 Prepaid expenses 116,000 Accrued revenue 363,000 Property and equipment 331,000 Right-of-use asset 370,000 Other long-term assets 446,000 Intangible assets: Tradename ( 12 1,040,000 Developed Technology ( 8 1,410,000 Existing customer relationships ( 10 15 3,910,000 Accounts payable (2,831,000 ) Loans payable, net of discounts and issuance costs (387,000 ) Accrued payroll and benefits (1,488,000 ) Lease obligations (491,000 ) Other current liabilities (368,000 ) Other non-current liabilities (17,000 ) Net assets acquired 8,227,000 Goodwill $ 1,271,000 |
GOODWILL (Tables)
GOODWILL (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Following Table Summarizes Changes In Companys Goodwill For Nine Months Ended September 30 2022 | |
The following table summarizes the changes in the Company’s goodwill for the nine months ended September 30, 2022: | The following table summarizes the changes in the Company’s goodwill for the nine months ended September 30, 2022: Goodwill Balance as of January 1, 2022 $ 10,090,000 Acquisition of AVLP 40,890,000 Acquisition of SMC 3,184,000 Acquisition of GIGA 1,271,000 Effect of exchange rate changes (891,000 ) Balance as of September 30, 2022 $ 54,544,000 |
INVESTMENTS _ RELATED PARTIES (
INVESTMENTS – RELATED PARTIES (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Investments Related Parties | |
Investments in Alzamend and Ault & Company at September 30, 2022 and December 31, 2021, were comprised of the following: | Investments in Alzamend and Ault & Company at September 30, 2022 and December 31, 2021, were comprised of the following: Investment in Promissory Notes, Related Parties Interest Due September 30, December 31, rate date 2022 2021 Investment in promissory note of Ault & Company 8 December 31, 2022 $ 2,500,000 $ 2,500,000 Accrued interest receivable, Ault & Company 318,000 170,000 Other - 172,000 Total investment in promissory note, related party $ 2,818,000 $ 2,842,000 Investment in Common Stock and Options, Related Parties September 30, December 31, 2022 2021 Investment in common stock and options of Alzamend $ 12,394,000 $ 13,230,000 |
The following table summarizes the changes in the Company’s investments in Alzamend and Ault & Company during the nine months ended September 30, 2022: | The following table summarizes the changes in the Company’s investments in Alzamend and Ault & Company during the nine months ended September 30, 2022: Investment in Investment in Balance at January 1, 2022 $ 13,230,000 $ 2,842,000 Investment in common stock and options of Alzamend 4,840,000 - Unrealized loss in common stock of Alzamend (5,676,000 ) - Amortization of related party investment - (173,000 ) Accrued interest - 149,000 Balance at September 30, 2022 $ 12,394,000 $ 2,818,000 |
The following table summarizes the changes in the Company’s investments in Alzamend common stock during the nine months ended September 30, 2022: | The following table summarizes the changes in the Company’s investments in Alzamend common stock during the nine months ended September 30, 2022: Shares of Per Share Investment in Common Stock Price Common Stock Balance at January 1, 2022 6,947,000 $ 1.90 $ 13,230,000 March 9, 2021 securities purchase agreement * 2,667,000 $ 1.50 4,000,000 Open market purchases after initial public offering 801,000 $ 1.05 840,000 Unrealized loss in common stock of Alzamend (5,676,000 ) Balance at September 30, 2022 10,415,000 $ 1.19 $ 12,394,000 * Pursuant to the March 9, 2021 securities purchase agreement, in aggregate, Alzamend agreed to sell up to 6,666,667 shares of its common stock to Ault Lending for $10.0 million, or $1.50 per share, and issue to Ault Lending warrants to acquire 3,333,334 shares of Alzamend common stock with an exercise price of $3.00 per share. As of December 31, 2021, Ault Lending funded $6.0 million, including the conversion of notes and advances of $0.8 million, and the remaining $4.0 million was funded upon Alzamend achieving certain milestones during the nine months ended September 30, 2022. |
INVESTMENT IN UNCONSOLIDATED _2
INVESTMENT IN UNCONSOLIDATED ENTITY – AVLP (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Investment In Unconsolidated Entity Avlp | |
The Company converted its AVLP convertible promissory note on June 1, 2022 as part of the acquisition of AVLP (see Note 8). Equity investments in the then unconsolidated entity, AVLP, at December 31, 2021, were comprised of the following: | The Company converted its AVLP convertible promissory note on June 1, 2022 as part of the acquisition of AVLP (see Note 8). Equity investments in the then unconsolidated entity, AVLP, at December 31, 2021, were comprised of the following: Investment in Promissory Notes Interest rate Due date December 31, 2021 Investment in convertible promissory note 12 2022-2026 $ 17,799,000 Investment in promissory note – Alpha Fund 8 June 30, 2022 3,600,000 Accrued interest receivable 2,092,000 Other 600,000 Total investment in promissory notes, gross 24,091,000 Less: provision for loan losses (2,000,000 ) Total investment in promissory note $ 22,091,000 |
The following table summarizes the changes in the Company’s equity investments in the then unconsolidated entity, AVLP, during the nine months ended September 30, 2022: | The following table summarizes the changes in the Company’s equity investments in the then unconsolidated entity, AVLP, during the nine months ended September 30, 2022: Investment in Investment in warrants and promissory notes Total common stock and advances investment Balance at January 1, 2022 $ 39,000 $ 22,091,000 $ 22,130,000 Investment in convertible promissory notes - 2,200,000 2,200,000 Loss from equity investment (39,000 ) (885,000 ) (924,000 ) Accrued interest - 143,000 143,000 Loss on remeasurement upon conversion - (2,700,000 ) (2,700,000 ) Conversion of AVLP convertible promissory notes - (17,040,000 ) (17,040,000 ) Elimination of intercompany debt after conversion - (3,809,000 ) (3,809,000 ) Balance at September 30, 2022 $ - $ - $ - |
ACCOUNTS PAYABLE AND ACCRUED _2
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Payables and Accruals [Abstract] | |
Schedule of other current liabilities | Other current liabilities at September 30, 2022 and December 31, 2021 consisted of: Schedule of other current liabilities September 30, December 31, 2022 2021 Accounts payable 22,467,000 $ 6,902,000 Accrued payroll and payroll taxes 9,531,000 5,027,000 Financial instrument liabilities 937,000 4,249,000 Accrued legal 1,787,000 2,637,000 Interest payable 4,140,000 187,000 Other accrued expenses 11,745,000 3,753,000 Total $ 50,607,000 $ 22,755,000 |
Schedule of Financial Instrument | The financial instruments were valued using a variety of pricing models with the following valuation assumptions: Schedule of Financial Instrument September 30, December 31, Contractually stipulated stock price $ 2.50 $ 2.50 Exercise price $ 2.50 $ 2.50 Contractually defined remaining term 5.0 5.0 Contractually defined volatility 135 % 135 % Dividend yield 0 % 0 % Risk-free interest rate 4.1 % 1.3 % |
Schedule of fair value of the financial instruments | The following table sets forth a summary of the changes in the estimated fair value of the financial instruments during the nine months ended September 30, 2022 and 2021: Schedule of fair value of the financial instruments September 30, 2022 September 30, 2021 Beginning balance $ 4,249,000 $ 4,192,000 Change in fair value 27,000 388,000 Extinguishment (3,339,000 ) - Ending balance $ 937,000 $ 4,580,000 |
NOTES PAYABLE (Tables)
NOTES PAYABLE (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Notes Payable | |
Schedule of notes payable | Notes payable at September 30, 2022 and December 31, 2021, were comprised of the following: Schedule of notes payable Interest Due date September 30, December 31, Short-term notes payable 12.0% Nov. 2022 $ 35,000 $ 118,000 10% original issue discount senior secured notes - 65,972,000 AGREE Madison secured construction loans 7.0% January 1, 2025 58,351,000 55,055,000 SMC line of credit 15.5% June 11, 2023 2,500,000 - SMC installment notes 7.6% June 18, 2024 177,000 - SMC notes payable 6.0% Sept. 2024-Feb. 2025 353,000 - XBTO note payable 12.5% December 30, 2023 3,384,000 - 10% secured promissory notes 10.0% August 10, 2023 10,093,000 - Short-term bank line of credit 4.7% Renews monthly 2,325,000 960,000 Total notes payable $ 77,218,000 $ 122,105,000 Less: Unamortized debt discounts (1,776,000 ) (27,496,000 ) Total notes payable, net $ 75,442,000 $ 94,609,000 Less: current portion (17,132,000 ) (39,554,000 ) Notes payable – long-term portion $ 58,310,000 $ 55,055,000 |
The following table summarizes the principal maturity schedule for our notes payable outstanding as of September 30, 2022: | The following table summarizes the principal maturity schedule for our notes payable outstanding as of September 30, 2022: Year Principal 2022 $ 18,049,000 2023 818,000 2024 - 2025 58,351,000 Total $ 77,218,000 |
CONVERTIBLE NOTES (Tables)
CONVERTIBLE NOTES (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Convertible Notes | |
Convertible notes payable at September 30, 2022 and December 31, 2021, were comprised of the following: | Convertible notes payable at September 30, 2022 and December 31, 2021, were comprised of the following: Conversion price per Interest rate Due date September 30, December 31, Convertible promissory note $ 4.00 4 May 10, 2024 $ 660,000 $ 660,000 AVLP convertible promissory notes $ 0.35 15 August 22, 2025 9,911,000 - Fair value of embedded options and derivatives 4,908,000 - Less: unamortized debt discounts (132,000 ) (192,000 ) Total convertible notes payable, net of financing cost $ 15,347,000 $ 468,000 Less: current portion (1,469,000 ) - Total convertible notes payable, net of financing cost, long term $ 13,878,000 $ 468,000 |
NET (LOSS) INCOME PER SHARE (Ta
NET (LOSS) INCOME PER SHARE (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Basic and diluted net income per common share for the nine months ended September 30, 2021 are calculated as follows: | 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 BitNile 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 |
Net Loss Per Share | Net Loss Per Share September 30, 2022 2021 Stock options 6,396,000 4,761,000 Restricted stock grants 2,085,000 - Warrants 18,493,000 5,936,000 Convertible notes 165,000 165,000 Convertible preferred stock 2,000 2,000 Total 27,141,000 10,864,000 |
SEGMENT AND CUSTOMERS INFORMA_2
SEGMENT AND CUSTOMERS INFORMATION (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
The following data presents the revenues, expenditures and other operating data of the Company’s operating segments for the three and nine months ended September 30, 2022: | The following data presents the revenues, expenditures and other operating data of the Company’s operating segments for the three and nine months ended September 30, 2022: Nine Months Ended September 30, 2022 GWW TurnOn Green Ault BNI AGREE Ault SMC Holding Total Revenue $ 21,530,000 $ 3,853,000 $ 220,000 $ - $ - $ - $ 17,114,000 $ - $ 42,717,000 Revenue, cryptocurrency mining - - - 11,398,000 - - - - 11,398,000 Revenue, commercial real estate leases - - - 822,000 - - - - 822,000 Revenue, lending and trading activities - - 32,224,000 - - - - - 32,224,000 Revenue, hotel operations - - - - 12,809,000 - - - 12,809,000 Total revenues $ 21,530,000 $ 3,853,000 $ 32,444,000 $ 12,220,000 $ 12,809,000 $ - $ 17,114,000 $ - $ 99,970,000 Depreciation and amortization expense $ 1,259,000 $ 403,000 $ 240,000 $ 6,949,000 $ 2,487,000 $ - $ 166,000 $ 473,000 $ 11,977,000 Income (loss) from operations $ (1,881,000 ) $ (2,577,000 ) $ 4,212,000 $ (6,138,000 ) $ 149,000 $ (1,100,000 ) $ 597,000 $ (19,262,000 ) $ (26,000,000 ) Capital expenditures for the nine $ 612,000 $ 176,000 $ 1,739,000 $ 77,299,000 $ 4,444,000 $ - $ 66,000 $ 164,000 $ 84,500,000 Three Months Ended September 30, 2022 GWW TurnOn Green Ault BNI AGREE Ault SMC Holding Total Revenue $ 7,781,000 $ 1,662,000 $ 201,000 $ - $ - $ - $ 17,114,000 $ - $ 26,758,000 Revenue, cryptocurrency mining - - - 3,874,000 - - - - 3,874,000 Revenue, commercial real estate leases - - - 273,000 - - - - 273,000 Revenue, lending and trading activities - - 13,360,000 - - - - - 13,360,000 Revenue, hotel operations - - - - 5,513,000 - - - 5,513,000 Total revenues $ 7,781,000 $ 1,662,000 $ 13,561,000 $ 4,147,000 $ 5,513,000 $ - $ 17,114,000 $ - $ 49,778,000 Depreciation and amortization expense $ 740,000 $ 393,000 $ 172,000 $ 2,809,000 $ 832,000 $ - $ 166,000 $ (264,000 ) $ 4,848,000 Income (loss) from operations $ (661,000 ) $ (957,000 ) $ 3,786,000 $ (2,321,000 ) $ 1,697,000 $ (314,000 ) $ 597,000 $ (5,138,000 ) $ (3,311,000 ) Capital expenditures for the three $ 327,000 $ 51,000 $ 890,000 $ 5,915,000 $ 4,425,000 $ - $ 66,000 $ 47,000 $ 11,721,000 AVLP, SMC and GIGA Segment Information The AVLP and SMC acquisitions were completed in June 2022 and the GIGA acquisition was completed in September 2022. As of September 30, 2022, identifiable assets for AVLP, SMC and GIGA were $ 47.5 million 40.0 million 19.2 million Segment information for the three and nine months ended September 30, 2021: Nine Months Ended September 30, 2021 GWW TurnOnGreen Ault BNI Ault Holding Total Revenue $ 19,198,000 $ 4,308,000 $ 236,000 $ 23,742,000 Revenue, cryptocurrency mining - - 693,000 693,000 Revenue, commercial real estate leases - - 530,000 530,000 Revenue, lending and trading activities - - 19,615,000 19,615,000 Revenue, hotel operations - - - Total revenues $ 19,198,000 $ 4,308,000 $ 19,851,000 $ 1,223,000 $ - $ - $ 44,580,000 Depreciation and amortization expense $ 951,000 $ 69,000 $ 146,000 $ 250,000 $ - $ 297,000 $ 1,713,000 Income (loss) from operations $ (766,000 ) $ (490,000 ) $ 12,390,000 $ (839,000 ) $ (331,000 ) $ (12,814,000 ) $ (2,850,000 ) Capital expenditures for the nine $ 686,000 $ - $ - $ 27,459,000 $ - $ - $ 28,145,000 Three Months Ended September 30, 2021 GWW TurnOn Green Ault BNI Ault Holding Total Revenue $ 6,373,000 $ 1,094,000 $ 110,000 $ - $ - $ - $ 7,577,000 Revenue, cryptocurrency mining - - - 272,000 - - 272,000 Revenue, commercial real estate leases - - - 226,000 - - 226,000 Revenue, lending and trading activities - - (38,869,000 ) - - - (38,869,000 ) Revenue, hotel operations - - - - - - - Total revenues $ 6,373,000 $ 1,094,000 $ (38,759,000 ) $ 498,000 $ - $ - $ (30,794,000 ) Depreciation and amortization expense $ 523,000 $ 56,000 $ 118,000 $ 98,000 $ - $ 281,000 $ 1,076,000 Income (loss) from operations $ 19,000 $ (408,000 ) $ (41,390,000 ) $ (339,000 ) $ (143,000 ) $ (7,613,000 ) $ (49,874,000 ) Capital expenditures for the three $ 120,000 $ - $ 22,435,000 $ - $ - $ 22,555,000 |
LIQUIDITY AND FINANCIAL CONDI_2
LIQUIDITY AND FINANCIAL CONDITION (Details Narrative) | Sep. 30, 2022 USD ($) |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Cash and cash equivalents | $ 10,100,000 |
Working capital | $ 25,700,000 |
The Company_s disaggregated rev
The Company’s disaggregated revenues consisted of the following for the three months ended September 30, 2022: (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Disaggregation of Revenue [Line Items] | ||||
Karaoke machines and related | $ 36,418,000 | $ 8,075,000 | $ 67,746,000 | $ 24,965,000 |
Revenue lending and trading activities | 13,360,000 | (38,869,000) | 32,224,000 | 19,615,000 |
Total revenue | 49,778,000 | (30,794,000) | 99,970,000 | 44,580,000 |
Power Supply Units [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Karaoke machines and related | 4,279,000 | 2,350,000 | 10,520,000 | 6,042,000 |
Digital Currency Mining Net [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Karaoke machines and related | 3,874,000 | 11,398,000 | 693,000 | |
Hotel Operations [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Karaoke machines and related | 5,513,000 | 12,809,000 | ||
Karaoke Machines and Related [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Karaoke machines and related | 17,114,000 | 17,114,000 | ||
Other [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Karaoke machines and related | 5,638,000 | 2,513,000 | 6,778,000 | 5,246,000 |
Goods Transferred At A Point In Time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Karaoke machines and related | 34,457,000 | 5,037,000 | 59,150,000 | 16,724,000 |
Services Transferred Over Time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Karaoke machines and related | 1,961,000 | 3,037,000 | 8,596,000 | 8,241,000 |
Healthcare Diagnostic Systems [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Karaoke machines and related | 2,285,000 | |||
Defense Systems [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Karaoke machines and related | 2,940,000 | 6,842,000 | 7,731,000 | |
Digital Currency Mining [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Karaoke machines and related | 272,000 | |||
GWW [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Karaoke machines and related | 2,177,000 | |||
Power Supply Systems [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Karaoke machines and related | 5,253,000 | |||
North America [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Karaoke machines and related | 29,697,000 | 3,126,000 | 49,542,000 | 10,503,000 |
Europe [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Karaoke machines and related | 2,827,000 | 1,751,000 | 7,593,000 | 5,918,000 |
Middle East [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Karaoke machines and related | 3,894,000 | 2,949,000 | 10,611,000 | 7,845,000 |
Other [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Karaoke machines and related | 249,000 | 699,000 | ||
GWW [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Karaoke machines and related | 7,782,000 | 6,373,000 | 21,530,000 | 19,198,000 |
Revenue lending and trading activities | ||||
Total revenue | 7,782,000 | 6,373,000 | 21,530,000 | 19,198,000 |
Revenue from contracts with customers | 19,198,000 | |||
GWW [Member] | Power Supply Units [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Karaoke machines and related | 2,799,000 | 1,256,000 | 6,928,000 | 1,734,000 |
GWW [Member] | Other [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Karaoke machines and related | 4,983,000 | 5,475,000 | ||
GWW [Member] | Goods Transferred At A Point In Time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Karaoke machines and related | 5,821,000 | 3,336,000 | 12,934,000 | 10,957,000 |
GWW [Member] | Services Transferred Over Time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Karaoke machines and related | 1,961,000 | 3,037,000 | 8,596,000 | 8,241,000 |
GWW [Member] | Healthcare Diagnostic Systems [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Karaoke machines and related | 2,285,000 | |||
GWW [Member] | Defense Systems [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Karaoke machines and related | 2,940,000 | 6,842,000 | 7,731,000 | |
GWW [Member] | Power Supply Systems [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Karaoke machines and related | 5,253,000 | |||
GWW [Member] | North America [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Karaoke machines and related | 2,472,000 | 1,415,000 | 5,094,000 | 5,444,000 |
GWW [Member] | Europe [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Karaoke machines and related | 2,288,000 | 1,848,000 | 7,007,000 | 5,600,000 |
GWW [Member] | Middle East [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Karaoke machines and related | 3,022,000 | 2,949,000 | 9,429,000 | 7,845,000 |
GWW [Member] | Other [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Karaoke machines and related | 161,000 | 309,000 | ||
Turn On Green [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Karaoke machines and related | 1,662,000 | 1,094,000 | 3,853,000 | 4,308,000 |
Revenue lending and trading activities | ||||
Total revenue | 1,662,000 | 1,094,000 | 3,853,000 | 4,308,000 |
Turn On Green [Member] | Power Supply Units [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Karaoke machines and related | 1,480,000 | 1,094,000 | 3,592,000 | 4,308,000 |
Turn On Green [Member] | Other [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Karaoke machines and related | 182,000 | 261,000 | ||
Turn On Green [Member] | Goods Transferred At A Point In Time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Karaoke machines and related | 1,662,000 | 1,094,000 | 3,853,000 | 4,308,000 |
Turn On Green [Member] | Services Transferred Over Time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Karaoke machines and related | ||||
Turn On Green [Member] | North America [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Karaoke machines and related | 1,428,000 | 1,103,000 | 3,262,000 | 3,600,000 |
Turn On Green [Member] | Europe [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Karaoke machines and related | 32,000 | (97,000) | 79,000 | 318,000 |
Turn On Green [Member] | Middle East [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Karaoke machines and related | 202,000 | 512,000 | ||
Turn On Green [Member] | Other [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Karaoke machines and related | 88,000 | 390,000 | ||
DP Lending [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Karaoke machines and related | 201,000 | 608,000 | 220,000 | 1,459,000 |
Revenue lending and trading activities | 13,360,000 | (38,869,000) | 32,224,000 | 19,615,000 |
Total revenue | 13,561,000 | (38,261,000) | 32,444,000 | 21,074,000 |
DP Lending [Member] | Digital Currency Mining Net [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Karaoke machines and related | 693,000 | |||
DP Lending [Member] | Other [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Karaoke machines and related | 201,000 | 336,000 | 220,000 | 766,000 |
DP Lending [Member] | Goods Transferred At A Point In Time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Karaoke machines and related | 201,000 | 607,000 | 220,000 | 1,459,000 |
DP Lending [Member] | Services Transferred Over Time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Karaoke machines and related | ||||
DP Lending [Member] | Digital Currency Mining [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Karaoke machines and related | 272,000 | |||
DP Lending [Member] | North America [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Karaoke machines and related | $ 608,000 | 19,000 | 1,459,000 | |
DP Lending [Member] | Europe [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Karaoke machines and related | 201,000 | 201,000 | ||
DP Lending [Member] | Middle East [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Karaoke machines and related | ||||
DP Lending [Member] | Other [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Karaoke machines and related | ||||
SMC [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Karaoke machines and related | 17,114,000 | 17,114,000 | ||
Revenue lending and trading activities | ||||
Total revenue | 17,114,000 | 17,114,000 | ||
SMC [Member] | Karaoke Machines and Related [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Karaoke machines and related | 17,114,000 | 17,114,000 | ||
SMC [Member] | Goods Transferred At A Point In Time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Karaoke machines and related | 17,114,000 | 17,114,000 | ||
SMC [Member] | North America [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Karaoke machines and related | 16,138,000 | 16,138,000 | ||
SMC [Member] | Europe [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Karaoke machines and related | 306,000 | 306,000 | ||
SMC [Member] | Middle East [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Karaoke machines and related | 670,000 | 670,000 | ||
BNI [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Karaoke machines and related | 4,146,000 | 12,220,000 | ||
Revenue lending and trading activities | ||||
Total revenue | 4,146,000 | 12,220,000 | ||
BNI [Member] | Digital Currency Mining Net [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Karaoke machines and related | 3,874,000 | 11,398,000 | ||
BNI [Member] | Other [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Karaoke machines and related | 272,000 | 822,000 | ||
BNI [Member] | Goods Transferred At A Point In Time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Karaoke machines and related | 4,146,000 | 12,220,000 | ||
BNI [Member] | North America [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Karaoke machines and related | 4,146,000 | 12,220,000 | ||
BNI [Member] | Europe [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Karaoke machines and related | ||||
BNI [Member] | Middle East [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Karaoke machines and related | ||||
AGREE [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Karaoke machines and related | 5,513,000 | 12,809,000 | ||
Revenue lending and trading activities | ||||
Total revenue | 5,513,000 | 12,809,000 | ||
AGREE [Member] | Hotel Operations [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Karaoke machines and related | 5,513,000 | 12,809,000 | ||
AGREE [Member] | Goods Transferred At A Point In Time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Karaoke machines and related | 5,513,000 | 12,809,000 | ||
AGREE [Member] | North America [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Karaoke machines and related | 5,513,000 | 12,809,000 | ||
AGREE [Member] | Europe [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Karaoke machines and related | ||||
AGREE [Member] | Middle East [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Karaoke machines and related |
The following table sets forth
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: (Details) - Fair Value, Recurring [Member] - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-Sale Securities | $ 142,292,000 | $ 179,550,000 |
Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-Sale Securities | 138,376,000 | 170,335,000 |
Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-Sale Securities | ||
Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-Sale Securities | 3,916,000 | 9,215,000 |
Alzamend A Related Party [Member] | Common Stock11 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-Sale Securities | 12,394,000 | 13,230,000 |
Alzamend A Related Party [Member] | Common Stock11 [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-Sale Securities | 12,394,000 | 13,230,000 |
Alzamend A Related Party [Member] | Common Stock11 [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-Sale Securities | ||
Alzamend A Related Party [Member] | Common Stock11 [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-Sale Securities | ||
Marketable Equity Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-Sale Securities | 8,561,000 | 40,380,000 |
Marketable Equity Securities [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-Sale Securities | 8,561,000 | 40,380,000 |
Marketable Equity Securities [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-Sale Securities | ||
Marketable Equity Securities [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-Sale Securities | ||
Cash And Marketable Securities Held In Trust [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-Sale Securities | 117,421,000 | 116,725,000 |
Cash And Marketable Securities Held In Trust [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-Sale Securities | 117,421,000 | 116,725,000 |
Cash And Marketable Securities Held In Trust [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-Sale Securities | ||
Cash And Marketable Securities Held In Trust [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-Sale Securities | ||
Debt Equity Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-Sale Securities | 3,916,000 | 9,215,000 |
Debt Equity Securities [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-Sale Securities | ||
Debt Equity Securities [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-Sale Securities | $ 3,916,000 | $ 9,215,000 |
The following table summarizes
The following table summarizes the changes in investments in other 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, 2022: (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Change in fair value of financial instruments | $ 3,000 | $ (259,000) | $ 27,000 | $ 130,000 |
Fair Value, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Balance at January 1, 2022 | 9,215,000 | |||
Investment in preferred stock | 6,495,000 | |||
Change in fair value of financial instruments | 25,850,000 | |||
Conversion to marketable securities | (37,644,000) | |||
Balance at September 30, 2022 | $ 3,916,000 | $ 3,916,000 |
The following table presents in
The following table presents information on certain assets measured at fair value on a recurring basis by level within the fair value hierarchy as of September 30, 2022 and December 31, 2021. There were no observable price changes or indicators of impairm (Details) - Fair Value, Recurring [Member] - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments in other equity securities that do not report net asset value | $ 41,641,000 | $ 21,241,000 |
Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments in other equity securities that do not report net asset value | ||
Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments in other equity securities that do not report net asset value | ||
Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments in other equity securities that do not report net asset value | $ 41,641,000 | $ 21,241,000 |
FAIR VALUE OF FINANCIAL INSTR_3
FAIR VALUE OF FINANCIAL INSTRUMENTS (Details Narrative) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Fair Value Disclosures [Abstract] | ||
Alternative investment | $ 41.6 | $ 21.4 |
Marketable equity securities wi
Marketable equity securities with readily determinable market prices consisted of the following as of September 30, 2022 and December 31, 2021: (Details) - Common Stock [Member] - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Net Investment Income [Line Items] | ||
Cost | $ 16,182,000 | $ 53,475,000 |
Gross unrealized gains | 281,000 | 32,000 |
Gross unrealized losses | (7,902,000) | (13,127,000) |
Fair value | $ 8,561,000 | $ 40,380,000 |
At September 30, 2022 and Decem
At September 30, 2022 and December 31, 2021, property and equipment consisted of: (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 256,836,000 | $ 115,004,000 |
Accumulated depreciation and amortization | (14,180,000) | (5,096,000) |
Property and equipment placed in service, net | 242,656,000 | 109,908,000 |
Deposits on cryptocurrency machines | 11,328,000 | 64,117,000 |
Property and equipment, net | 253,984,000 | 174,025,000 |
Cryptocurrency Machines and Related Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 131,141,000 | 10,763,000 |
Computer Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 20,315,000 | 8,884,000 |
Office Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 2,750,000 | 702,000 |
Oil and Gas [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 972,000 | |
Land [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 25,646,000 | 25,696,000 |
Building [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 76,012,000 | $ 68,959,000 |
Summary of depreciation expense
Summary of depreciation expense: (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation expense | $ 3,942,000 | $ 265,000 | $ 10,229,000 | $ 711,000 |
PROPERTY AND EQUIPMENT, NET (De
PROPERTY AND EQUIPMENT, NET (Details Narrative) | Jul. 11, 2022 |
Ault Energy LLC [Member] | |
Description of newly formed subsidiary | on drilling projects across 30,000 acres in Texas, Louisiana and Mississippi. Ault Energy, as the designee of Ault Lending, LLC (“Ault Lending”), has the right to purchase up to 25%, or such higher percentages at the discretion of White River, in various drilling projects of White River. In August 2022, Ault Energy purchased a 40% working interest of the Harry O’Neal 20-9 No.1 drilling project in Mississippi for $972,000 included in property and equipment. |
The following table presents th
The following table presents the final allocation of the consideration transferred to the assets acquired and liabilities assumed based on their fair values. (Details) | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Business Combination and Asset Acquisition [Abstract] | |
Total purchase consideration | $ 20,706,000 |
Fair value of non-controlling interest | 6,738,000 |
Total consideration | 27,444,000 |
Cash | 1,245,000 |
Prepaid expenses and other current assets | 55,000 |
Property and equipment | 5,057,000 |
Note receivable | 800,000 |
Accounts payable and accrued expenses | (5,018,000) |
Convertible notes payable, principal | (9,734,000) |
Fair value of embedded derivative | (1,226,000) |
Fair value of bifurcated conversion option | (4,425,000) |
Fair value of bifurcated put option | (200,000) |
Net liabilities assumed | (13,446,000) |
Goodwill | $ 40,890,000 |
The following table presents _2
The following table presents the preliminary allocation of the consideration transferred to the assets acquired and liabilities assumed based on their fair values. (Details) | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Business Combination and Asset Acquisition [Abstract] | |
Total purchase consideration | $ 10,517,000 |
Fair value of non-controlling interest | 10,336,000 |
Total consideration | 20,853,000 |
Cash | 2,278,000 |
Accounts receivables | 9,891,000 |
Prepaid expenses and other current assets | 673,000 |
Inventories | 12,840,000 |
Property and equipment, net | 529,000 |
Right-of-use assets | 1,073,000 |
Other assets | 83,000 |
Trade names-estimated useful life of 19 years | 2,470,000 |
Customer relationships-estimated useful life of 16 years | 1,380,000 |
Proprietary technology-estimated useful life of 3 years | 600,000 |
Accounts payable and accrued expenses | (10,052,000) |
Notes payable | (2,972,000) |
Lease liabilities | (1,124,000) |
Net assets acquired | 17,669,000 |
Goodwill | $ 3,184,000 |
The following unaudited pro for
The following unaudited pro forma consolidated results of operations for the nine months ended September 30, 2022 have been prepared as if the SMC acquisition had occurred on January 1, 2022. (Details) | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Business Combination and Asset Acquisition [Abstract] | |
Total revenues | $ 131,609,000 |
Net loss attributable to BitNile Holdings, Inc. | $ (62,202,000) |
The preliminary purchase price
The preliminary purchase price allocation is as follows: (Details) | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Total purchase consideration | $ 6,763,000 |
Fair value of non-controlling interest | 2,735,000 |
Total consideration | 9,498,000 |
Cash | 107,000 |
Accounts receivables | 536,000 |
Inventories | 5,180,000 |
Prepaid expenses and other current assets | 116,000 |
Prepaid expenses and other current assets | 363,000 |
Property and equipment, net | 331,000 |
Right-of-use assets | 370,000 |
Other assets | 446,000 |
Trade names-estimated useful life of 19 years | 1,040,000 |
Trade names-estimated useful life of 19 years | 1,410,000 |
Customer relationships-estimated useful life of 16 years | 3,910,000 |
Accounts payable and accrued expenses | (2,831,000) |
Notes payable | (387,000) |
Notes payable | (1,488,000) |
Lease liabilities | (491,000) |
Lease liabilities | (368,000) |
Lease liabilities | (17,000) |
Net assets acquired | 8,227,000 |
Goodwill | $ 1,271,000 |
Trade Names [Member] | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Equipment useful life | 12 years |
Developed Technology Rights [Member] | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Equipment useful life | 8 years |
Customer Relationships [Member] | Minimum [Member] | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Equipment useful life | 10 years |
Customer Relationships [Member] | Maximum [Member] | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Equipment useful life | 15 years |
BUSINESS COMBINATIONS (Details
BUSINESS COMBINATIONS (Details Narrative) - USD ($) | 9 Months Ended | ||
Sep. 08, 2022 | Sep. 30, 2022 | Dec. 31, 2021 | |
Business Acquisition [Line Items] | |||
Convertible promissory notes | $ 13,878,000 | $ 468,000 | |
Purchase price of common stock aquired | 7,400,000 | ||
Interest and Other income1 | 3,100,000 | ||
Interst and other income | 10,500,000 | ||
Non controlling interest at fair value | $ 10,300,000 | ||
Operating Lease, Weighted Average Discount Rate, Percent | 12% | ||
Royalty [Member] | Minimum [Member] | |||
Business Acquisition [Line Items] | |||
Royalty rates | 1% | ||
Royalty [Member] | Maximum [Member] | |||
Business Acquisition [Line Items] | |||
Royalty rates | 7% | ||
AVLP Acquisition [Member] | |||
Business Acquisition [Line Items] | |||
Convertible promissory notes | $ 20,000,000 | ||
Accrued interest receivable | $ 5,900,000 | ||
Ownership % | 20% | ||
Ownership maximum percentage | 92% | ||
Description of acquisition | The consideration transferred for the Company’s approximate 92% ownership interest in connection with this acquisition aggregated $20.7 million, which represented the fair value of the Company’s holdings in AVLP immediately prior to conversion. The carrying amount of the Company’s holdings in AVLP immediately prior to conversion was $23.4 million, resulting in a $2.7 million loss for the related remeasurement, which was recognized in interest and other income. | ||
SMC Acquisition [Member] | |||
Business Acquisition [Line Items] | |||
Description of acquisition | the Company owned more than 50% of the issued and outstanding common stock of SMC. The Company’s ownership of SMC stood at approximately 57% as of September 30, 2022. | ||
GIGA Acquisition [Member] | |||
Business Acquisition [Line Items] | |||
Convertible promissory notes | $ 4,250,000 | ||
Ownership % | 71.20% | ||
Description of acquisition | acquired 100% of the capital stock of GWW from the Company in exchange for 2.92 million shares of GIGA’s common stock and 514.8 shares of GIGA’s Series F Convertible Preferred Stock (“Series F”) that are convertible into an aggregate of 3.96 million shares of GIGA’s common stock. GIGA also assumed GWW’s outstanding equity awards representing the right to receive up to 749,626 shares of GIGA’s common stock, on an as-converted basis. The transaction described above resulted in a change of control of GIGA. Assuming the Company was to convert all of the Series F, the common stock owned by the Company after such conversion would result in the Company owning approximately 71.2% of GIGA’s outstanding shares. | ||
Purchase price of common stock aquired | $ 9,500,000 | ||
Interest and Other income1 | 4,000,000 | ||
Interst and other income | 400,000 | ||
Non controlling interest at fair value | 3,700,000 | ||
Non controlling interest at fair value | $ 1,300,000 |
The following table summarize_2
The following table summarizes the changes in the Company’s goodwill for the nine months ended September 30, 2022: (Details) | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Following Table Summarizes Changes In Companys Goodwill For Nine Months Ended September 30 2022 | |
Beginning balance | $ 10,090,000 |
Acquisition of AVLP | 40,890,000 |
Acquisition of SMC | 3,184,000 |
Acquisition of GIGA | 1,271,000 |
Effect of exchange rate changes | (891,000) |
Ending balance | $ 54,544,000 |
INCREASE IN OWNERSHIP INTERES_2
INCREASE IN OWNERSHIP INTEREST OF SUBSIDIARIES (Details Narrative) - USD ($) | 1 Months Ended | 9 Months Ended | ||
May 12, 2022 | Sep. 30, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | |
Noncontrolling Interest [Abstract] | ||||
Purchase agreement | $ 1,800,000 | |||
Minoruty Interest | 30% | |||
Market purchase (in shares) | 274,000 | |||
Payment to purchase in open market | $ 2,100,000 | $ 1,981,000 | $ 2,144,000 |
Investments in Alzamend and Aul
Investments in Alzamend and Ault & Company at September 30, 2022 and December 31, 2021, were comprised of the following: (Details) - Avalanche international Corp and Alzamend [Member] - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Restructuring Cost and Reserve [Line Items] | ||
Investment interest rate | 8% | |
Investment due date | Dec. 31, 2022 | |
Investment in promissory note of Ault & Company | $ 2,500,000 | $ 2,500,000 |
Accrued interest receivable Ault & Company | 318,000 | 170,000 |
Other | 172,000 | |
Total investment in promissory notes, related parties | 2,818,000 | 2,842,000 |
Investment in common stock and options of Alzamend | $ 12,394,000 | $ 13,230,000 |
The following table summarize_3
The following table summarizes the changes in the Company’s investments in Alzamend and Ault & Company during the nine months ended September 30, 2022: (Details) - Avalanche international Corp and Alzamend [Member] | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Warrants and Common Stock [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Beginning Balance | $ 13,230,000 |
Investment in common stock and options of Alzamend | 4,840,000 |
Unrealized loss in common stock of Alzamend | (5,676,000) |
Ending Balance | 12,394,000 |
Convertible Promissory Note [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Beginning Balance | 2,842,000 |
Amortization of related party investment | (173,000) |
Accrued interest | 149,000 |
Ending Balance | $ 2,818,000 |
The following table summarize_4
The following table summarizes the changes in the Company’s investments in Alzamend common stock during the nine months ended September 30, 2022: (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | ||
Restructuring Cost and Reserve [Line Items] | ||||
Securities purchase agreement | $ 1,669,000 | $ 1,669,000 | ||
Unrealized loss in common stock of Alzamend | $ 449,000 | |||
Common Stock [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Securities purchase agreement | ||||
Unrealized loss in common stock of Alzamend | ||||
Alzamend [Member] | Common Stock [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Begining balance (in shares) | 6,947,000 | |||
Begining balance (in dollars per shares) | $ 1.90 | |||
Begining balance | $ 13,230,000 | |||
Securities purchase agreement (in shares) | [1] | 2,667,000 | ||
Securities purchase agreement (in dollars per shares) | [1] | $ 1.50 | ||
Securities purchase agreement | [1] | $ 4,000,000 | ||
Open market purchases after initial public offering (in shares) | 801,000 | |||
Open market purchases after initial public offering (in dollars per shares) | $ 1.05 | |||
Open market purchases after initial public offering | $ 840,000 | |||
Unrealized loss in common stock of Alzamend | $ (5,676,000) | |||
Ending balance (in shrares) | 10,415,000 | 10,415,000 | ||
Ending balance (in dollars per shares) | $ 1.19 | $ 1.19 | ||
Ending balance | $ 12,394,000 | $ 12,394,000 | ||
[1]Pursuant to the March 9, 2021 securities purchase agreement, in aggregate, Alzamend agreed to sell up to 6,666,667 shares of its common stock to Ault Lending for $10.0 million, or $1.50 per share, and issue to Ault Lending warrants to acquire 3,333,334 shares of Alzamend common stock with an exercise price of $3.00 per share. As of December 31, 2021, Ault Lending funded $6.0 million, including the conversion of notes and advances of $0.8 million, and the remaining $4.0 million was funded upon Alzamend achieving certain milestones during the nine months ended September 30, 2022. |
The Company converted its AVLP
The Company converted its AVLP convertible promissory note on June 1, 2022 as part of the acquisition of AVLP (see Note 8). Equity investments in the then unconsolidated entity, AVLP, at December 31, 2021, were comprised of the following: (Details) - Avalanche international Corp and Alzamend [Member] | 12 Months Ended |
Dec. 31, 2021 USD ($) | |
Restructuring Cost and Reserve [Line Items] | |
Investment in convertible promissory note percentage | 12% |
Investment in convertible promissory note, date | 2022-2026 |
Investment in convertible promissory note | $ 17,799,000 |
Investment in promissory note percentage | 8% |
Investment in promissory note, date | June 30, 2022 |
Investment in promissory note | $ 3,600,000 |
Accrued interest receivable | 2,092,000 |
Other | 600,000 |
Total investment in promissory notes, gross | 24,091,000 |
Less: provision for loan losses | (2,000,000) |
Total investment in promissory note | $ 22,091,000 |
The following table summarize_5
The following table summarizes the changes in the Company’s equity investments in the then unconsolidated entity, AVLP, during the nine months ended September 30, 2022: (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Restructuring Cost and Reserve [Line Items] | ||
Loss on remeasurement upon conversion | $ 2,700,000 | |
Avalanche international Corp and Alzamend [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Balance at begining | 22,130,000 | |
Total investment, investment in convertible promissory notes | 2,200,000 | |
Total investment, loss from equity investment | (924,000) | |
Total investment, accrued interest | 143,000 | |
Loss on remeasurement upon conversion | (2,700,000) | |
Total investment, conversion of AVLP convertible promissory notes | (17,040,000) | |
Total investment, elimination of intercompany debt after conversion | (3,809,000) | |
Balance at ending | ||
Avalanche international Corp and Alzamend [Member] | Warrants and Common Stock [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Balance at begining | 39,000 | |
Total investment, loss from equity investment | (39,000) | |
Balance at ending | ||
Avalanche international Corp and Alzamend [Member] | Convertible Promissory Note [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Balance at begining | 22,091,000 | |
Total investment, investment in convertible promissory notes | 2,200,000 | |
Total investment, loss from equity investment | (885,000) | |
Total investment, accrued interest | 143,000 | |
Loss on remeasurement upon conversion | (2,700,000) | |
Total investment, conversion of AVLP convertible promissory notes | (17,040,000) | |
Total investment, elimination of intercompany debt after conversion | (3,809,000) | |
Balance at ending |
CONSOLIDATED VARIABLE INTERES_2
CONSOLIDATED VARIABLE INTEREST ENTITY - ALPHA FUND (Details Narrative) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2022 | Dec. 31, 2021 | |
Cost | $ 33 | $ 17 |
percenatge of cost | 100% | |
Additioiinal increase | $ 16 | |
Series D Preferred Stock [Member] | ||
Treasury stock | 45,049,871 | |
Treasury stock, shares | 91,033 | |
Preferred stock, dividend rate | 13% |
Schedule of other current liabi
Schedule of other current liabilities (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Payables and Accruals [Abstract] | ||
Accounts payable | $ 22,467,000 | $ 6,902,000 |
Accrued payroll and payroll taxes | 9,531,000 | 5,027,000 |
Financial instrument liabilities | 937,000 | 4,249,000 |
Accrued legal | 1,787,000 | 2,637,000 |
Interest payable | 4,140,000 | 187,000 |
Other accrued expenses | 11,745,000 | 3,753,000 |
Total | $ 50,607,000 | $ 22,755,000 |
Schedule of Financial Instrumen
Schedule of Financial Instrument (Details) - $ / shares | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Payables and Accruals [Abstract] | ||
Stock price | $ 2.50 | $ 2.50 |
Exercise price | $ 2.50 | $ 2.50 |
Contractually defined remaining term | 5 years | 5 years |
Contractually defined volatility | 135% | 135% |
Dividend yield | 0% | 0% |
Risk-free interest rate | 4.10% | 1.30% |
Schedule of fair value of the f
Schedule of fair value of the financial instruments (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Payables and Accruals [Abstract] | ||
Balance at beginning | $ 4,249,000 | $ 4,192,000 |
Change in fair value | 27,000 | 388,000 |
Extinguishment | (3,339,000) | |
Balance at end | $ 937,000 | $ 4,580,000 |
Schedule of notes payable (Deta
Schedule of notes payable (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Short-Term Debt [Line Items] | ||
Total notes payable | $ 77,218,000 | $ 122,105,000 |
Unamortized debt discounts | (1,776,000) | (27,496,000) |
Total notes payable, net | 75,442,000 | 94,609,000 |
Less: current portion | (17,132,000) | (39,554,000) |
Notes payable - long-term portion | $ 58,310,000 | 55,055,000 |
Short Term Notes [Member] | ||
Short-Term Debt [Line Items] | ||
Interest rate | 12% | |
Total notes payable | $ 35,000 | 118,000 |
Notes Payable to Wells Fargo [Member] | ||
Short-Term Debt [Line Items] | ||
Total notes payable | 65,972,000 | |
Madison Secured Construction Loans [Member] | ||
Short-Term Debt [Line Items] | ||
Interest rate | 7% | |
Total notes payable | $ 58,351,000 | 55,055,000 |
SMC Line of Credit [Member] | ||
Short-Term Debt [Line Items] | ||
Interest rate | 15.50% | |
Total notes payable | $ 2,500,000 | |
SMC installment Notes [Member] | ||
Short-Term Debt [Line Items] | ||
Interest rate | 7.60% | |
Total notes payable | $ 177,000 | |
SMC Notes Payable [Member] | ||
Short-Term Debt [Line Items] | ||
Interest rate | 6% | |
Total notes payable | $ 353,000 | |
XBTO Trading Note Payable [Member] | ||
Short-Term Debt [Line Items] | ||
Interest rate | 12.50% | |
Total notes payable | $ 3,384,000 | |
Secured Promissory Notes [Member] | ||
Short-Term Debt [Line Items] | ||
Interest rate | 10% | |
Total notes payable | $ 10,093,000 | |
Short Term Bank Credit [Member] | ||
Short-Term Debt [Line Items] | ||
Interest rate | 4.70% | |
Total notes payable | $ 2,325,000 | $ 960,000 |
The following table summarize_6
The following table summarizes the principal maturity schedule for our notes payable outstanding as of September 30, 2022: (Details) | Sep. 30, 2022 USD ($) |
Notes Payable | |
2022 | $ 18,049,000 |
2023 | 818,000 |
2024 | |
2025 | 58,351,000 |
Total | $ 77,218,000 |
NOTES PAYABLE (Details Narrativ
NOTES PAYABLE (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Aug. 10, 2022 | Mar. 31, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Purchace price | $ 4,103,000 | $ 4,952,000 | ||
Repayment of promissary note | $ 66,000,000 | |||
Amortization of debt discount (premium) | $ 26,300,000 | |||
Securities Purchase Agreement [Member] | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Face value | $ 11,000,000 | |||
Purchace price | 10,000,000 | |||
Purchace price | 10,000,000 | |||
Purchace price | $ 23,100,000 | |||
Securities Purchase Agreement [Member] | Promissory Note [Member] | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Percentage of original issue discount | 10% | |||
Maturity date description | The maturity date of the secured promissory notes is August 10, 2023. The Company is required to make monthly payment (principal and interest) of $1,000,000 on the tenth calendar day of each month, starting in September 2022. Provided that the Company makes the first six monthly payments in full and on a timely basis, after six months, the Company may elect to pay a forbearance fee of $250,000 in lieu of a monthly payment, which would extend the maturity date of the related secured promissory notes by one month for each forbearance. The Company may not elect forbearance in consecutive months. |
Convertible notes payable at Se
Convertible notes payable at September 30, 2022 and December 31, 2021, were comprised of the following: (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2022 | Dec. 31, 2021 | |
Debt Instrument [Line Items] | ||
Less: unamortized debt discounts | $ (132,000) | $ (192,000) |
Total convertible notes payable, net of financing cost | 15,347,000 | 468,000 |
Less: current portion | (1,469,000) | |
Total convertible notes payable, net of financing cost, long term | $ 13,878,000 | 468,000 |
Convertible Debt Three [Member] | ||
Debt Instrument [Line Items] | ||
Conversion price (in dollars per share) | $ 4 | |
Weighted average interest rate | 4% | |
Due date | May 10, 2024 | |
Convertible note | $ 660,000 | $ 660,000 |
AVLP Convertible Debt [Member] | ||
Debt Instrument [Line Items] | ||
Conversion price (in dollars per share) | $ 0.35 | |
Weighted average interest rate | 15% | |
Due date | Aug. 22, 2025 | |
Convertible note | $ 9,911,000 | |
Fair Value Of Embedded Derivative [Member] | ||
Debt Instrument [Line Items] | ||
Convertible note | $ 4,908,000 |
CONVERTIBLE NOTES (Details Narr
CONVERTIBLE NOTES (Details Narrative) - AVLP And Alzamend [Member] - Convertible Promissory Note [Member] | 9 Months Ended |
Sep. 30, 2022 | |
Restructuring Cost and Reserve [Line Items] | |
Debt conversion converted instrument rate | 7% |
Description of conversion price | (i) if the aggregate market capital of AVLP on the date of conversion (the “Market Cap”) is $35 million or less, at a 25% discount to the market price, or (ii) if the Market Cap is greater than $35 million, at a 25% discount to the market price, provided that such discount shall be increased by dividing it by the quotient that shall be obtained by dividing $35 million by the Market Cap at the time of conversion, provided, however, any increase in the discount to the market price shall not result in a discount that is greater than a 75% discount (the “Conversion Price”). Notwithstanding the foregoing, in no event shall the Conversion Price be less than $0.35. |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Narrative) | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Ding Gu [Member] | |
Loss Contingencies [Line Items] | |
Damages amount | $ 1,100,000 |
Blockchain Mining Supply and Services Ltd [Member] | |
Loss Contingencies [Line Items] | |
Damages amount | $ 1,388,495 |
STOCKHOLDERS_ EQUITY (Details N
STOCKHOLDERS’ EQUITY (Details Narrative) - USD ($) | 9 Months Ended | ||||
Jun. 14, 2022 | Jun. 03, 2022 | Feb. 25, 2022 | Sep. 30, 2022 | Dec. 31, 2021 | |
Class of Stock [Line Items] | |||||
Preferred stock, authorized shares | 2,000,000 | ||||
IPO [Member] | |||||
Class of Stock [Line Items] | |||||
Proceeds from issuance offering | $ 3,600,000 | ||||
Non-accountable fees and offering expenses | $ 3,100,000 | ||||
Series D Preferred Stock [Member] | |||||
Class of Stock [Line Items] | |||||
Preferred stock, authorized shares | 2,000,000 | 2,000,000 | |||
Preferred stock, per share | $ 0.001 | $ 0.001 | |||
Series D Preferred Stock [Member] | IPO [Member] | |||||
Class of Stock [Line Items] | |||||
Preferred stock price | 144,000 | ||||
Preferred stock, per share | $ 25 | ||||
At The Market Issuance Sales Agreement [Member] | |||||
Class of Stock [Line Items] | |||||
Proceeds from issuance of common stock | $ 207,000 | ||||
Proceeds from issuance offering | $ 256,700,000 | ||||
At The Market Issuance Sales Agreement [Member] | Series D Preferred Stock [Member] | |||||
Class of Stock [Line Items] | |||||
Proceeds from issuance offering | $ 46,400,000 | ||||
Shares sold | 10,928 | ||||
At The Market Issuance Sales Agreement [Member] | Wilson Davis And Co Inc [Member] | |||||
Class of Stock [Line Items] | |||||
Proceeds from issuance of common stock | $ 200,000,000 | $ 168,000,000 |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) - USD ($) | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | ||
Effective income tax rate | 0.60% | (9.10%) |
Income tax provision | $ 400,000 | $ 100,000 |
Federal statutory rate | 21% |
Basic and diluted net income pe
Basic and diluted net income per common share for the nine months ended September 30, 2021 are calculated as follows: (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Net income attributable to BitNile Holdings | $ 1,346,000 | |||
Less: Preferred stock dividends | $ (190,000) | $ (4,000) | $ (239,000) | (13,000) |
Net income available to common stockholders | $ (7,461,000) | $ (42,874,000) | $ (62,046,000) | $ 1,333,000 |
Weighted average number of shares, basic | 49,714,000 | |||
Per-Share amount | $ (0.03) | $ (0.73) | $ (0.27) | $ 0.03 |
Income available to common stockholders plus assumed conversions | $ 1,333,000 | |||
Income available to common stockholders plus assumed conversions, shares | 50,145,000 | |||
Income available to common stockholders plus assumed conversions, per share | $ 0.03 | |||
Restricted Stock [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Restricted stock grants | ||||
Restricted stock, share grants | 431,000 |
Net Loss Per Share (Details)
Net Loss Per Share (Details) - shares | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Earnings Per Share [Abstract] | ||
Stock options | 6,396,000 | 4,761,000 |
Restricted stock grants | 2,085,000 | |
Warrants | 18,493,000 | 5,936,000 |
Convertible notes | 165,000 | 165,000 |
Convertible preferred stock | 2,000 | 2,000 |
Total | 27,141,000 | 10,864,000 |
The following data presents the
The following data presents the revenues, expenditures and other operating data of the Company’s operating segments for the three and nine months ended September 30, 2022: (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Segment Reporting Information [Line Items] | ||||
Depreciation and amortization expense | $ 11,977,000 | $ 1,713,000 | ||
Income (loss) from operations | $ (5,311,000) | $ (49,874,000) | (28,000,000) | (2,850,000) |
Capital expenditures for the three months ended September 30, 2021 | 84,500,000 | 28,145,000 | ||
Operating Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 26,758,000 | 7,577,000 | 42,717,000 | 23,742,000 |
Revenue, cryptocurrency mining | 3,874,000 | 272,000 | 11,398,000 | 693,000 |
Revenue, commercial real estate leases | 273,000 | 226,000 | 822,000 | 530,000 |
Revenue, lending and trading activities | 13,360,000 | (38,869,000) | 32,224,000 | 19,615,000 |
Revenue, hotel operations | 5,513,000 | 12,809,000 | ||
Total revenues | 49,778,000 | (30,794,000) | 99,970,000 | 44,580,000 |
Depreciation and amortization expense | 4,848,000 | 1,076,000 | 11,977,000 | 1,713,000 |
Income (loss) from operations | (3,311,000) | (49,874,000) | (26,000,000) | (2,850,000) |
Capital expenditures for the three months ended September 30, 2021 | 11,721,000 | 22,555,000 | 84,500,000 | 28,145,000 |
Operating Segments [Member] | GWW [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 7,781,000 | 6,373,000 | 21,530,000 | 19,198,000 |
Revenue, cryptocurrency mining | ||||
Revenue, commercial real estate leases | ||||
Revenue, lending and trading activities | ||||
Revenue, hotel operations | ||||
Total revenues | 7,781,000 | 6,373,000 | 21,530,000 | 19,198,000 |
Depreciation and amortization expense | 740,000 | 523,000 | 1,259,000 | 951,000 |
Income (loss) from operations | (661,000) | 19,000 | (1,881,000) | (766,000) |
Capital expenditures for the three months ended September 30, 2021 | 327,000 | 120,000 | 612,000 | 686,000 |
Operating Segments [Member] | Turn On Green [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 1,662,000 | 1,094,000 | 3,853,000 | 4,308,000 |
Revenue, cryptocurrency mining | ||||
Revenue, commercial real estate leases | ||||
Revenue, lending and trading activities | ||||
Revenue, hotel operations | ||||
Total revenues | 1,662,000 | 1,094,000 | 3,853,000 | 4,308,000 |
Depreciation and amortization expense | 393,000 | 56,000 | 403,000 | 69,000 |
Income (loss) from operations | (957,000) | (408,000) | (2,577,000) | (490,000) |
Capital expenditures for the three months ended September 30, 2021 | 51,000 | 176,000 | ||
Operating Segments [Member] | Ault [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 201,000 | 110,000 | 220,000 | 236,000 |
Revenue, cryptocurrency mining | ||||
Revenue, commercial real estate leases | ||||
Revenue, lending and trading activities | 13,360,000 | (38,869,000) | 32,224,000 | 19,615,000 |
Revenue, hotel operations | ||||
Total revenues | 13,561,000 | (38,759,000) | 32,444,000 | 19,851,000 |
Depreciation and amortization expense | 172,000 | 118,000 | 240,000 | 146,000 |
Income (loss) from operations | 3,786,000 | (41,390,000) | 4,212,000 | 12,390,000 |
Capital expenditures for the three months ended September 30, 2021 | 890,000 | 1,739,000 | ||
Operating Segments [Member] | BNI [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | ||||
Revenue, cryptocurrency mining | 3,874,000 | 272,000 | 11,398,000 | 693,000 |
Revenue, commercial real estate leases | 273,000 | 226,000 | 822,000 | 530,000 |
Revenue, lending and trading activities | ||||
Revenue, hotel operations | ||||
Total revenues | 4,147,000 | 498,000 | 12,220,000 | 1,223,000 |
Depreciation and amortization expense | 2,809,000 | 98,000 | 6,949,000 | 250,000 |
Income (loss) from operations | (2,321,000) | (339,000) | (6,138,000) | (839,000) |
Capital expenditures for the three months ended September 30, 2021 | 5,915,000 | 22,435,000 | 77,299,000 | 27,459,000 |
Operating Segments [Member] | AGREE [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | ||||
Revenue, cryptocurrency mining | ||||
Revenue, commercial real estate leases | ||||
Revenue, lending and trading activities | ||||
Revenue, hotel operations | 5,513,000 | 12,809,000 | ||
Total revenues | 5,513,000 | 12,809,000 | ||
Depreciation and amortization expense | 832,000 | 2,487,000 | ||
Income (loss) from operations | 1,697,000 | 149,000 | ||
Capital expenditures for the three months ended September 30, 2021 | 4,425,000 | 4,444,000 | ||
Operating Segments [Member] | Ault Disoerative [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | ||||
Revenue, cryptocurrency mining | ||||
Revenue, commercial real estate leases | ||||
Revenue, lending and trading activities | ||||
Revenue, hotel operations | ||||
Total revenues | ||||
Depreciation and amortization expense | ||||
Income (loss) from operations | (314,000) | (143,000) | (1,100,000) | (331,000) |
Capital expenditures for the three months ended September 30, 2021 | ||||
Operating Segments [Member] | SMC [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 17,114,000 | 17,114,000 | ||
Revenue, cryptocurrency mining | ||||
Revenue, commercial real estate leases | ||||
Revenue, lending and trading activities | ||||
Revenue, hotel operations | ||||
Total revenues | 17,114,000 | 17,114,000 | ||
Depreciation and amortization expense | 166,000 | 166,000 | ||
Income (loss) from operations | 597,000 | 597,000 | ||
Capital expenditures for the three months ended September 30, 2021 | 66,000 | 66,000 | ||
Operating Segments [Member] | Holding Company 1 [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | ||||
Revenue, cryptocurrency mining | ||||
Revenue, commercial real estate leases | ||||
Revenue, lending and trading activities | ||||
Revenue, hotel operations | ||||
Total revenues | ||||
Depreciation and amortization expense | (264,000) | 281,000 | 473,000 | 297,000 |
Income (loss) from operations | (5,138,000) | (7,613,000) | (19,262,000) | (12,814,000) |
Capital expenditures for the three months ended September 30, 2021 | $ 47,000 | $ 164,000 |
SEGMENT AND CUSTOMERS INFORMA_3
SEGMENT AND CUSTOMERS INFORMATION (Details Narrative) $ in Millions | 9 Months Ended | |
Sep. 30, 2022 USD ($) Number | Sep. 30, 2021 Number | |
Restructuring Cost and Reserve [Line Items] | ||
Number of reportable segments | Number | 7 | 5 |
AVLP Acquisition [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Identifiable assets | $ 47.5 | |
SMC Acquisition [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Identifiable assets | 40 | |
GIGA Acquisition [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Identifiable assets | $ 19.2 |
CONCENTRATIONS OF CREDIT AND _2
CONCENTRATIONS OF CREDIT AND REVENUE RISK (Details Narrative) - Accounts Receivable [Member] | 3 Months Ended | 9 Months Ended |
Sep. 30, 2022 | Sep. 30, 2022 | |
Three Customers [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk (percent) | 15% | 36% |
Two Customers [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk (percent) | 10% |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - USD ($) | 1 Months Ended | 2 Months Ended | |||||||
Nov. 18, 2022 | Nov. 07, 2022 | Nov. 07, 2022 | Oct. 14, 2022 | May 12, 2022 | Nov. 18, 2022 | Nov. 18, 2022 | Sep. 30, 2022 | Dec. 31, 2021 | |
Subsequent Event [Line Items] | |||||||||
Interest rate | $ 1,800,000 | ||||||||
Price per share | $ 2.50 | $ 2.50 | |||||||
Purchase price | $ 15,800,000 | ||||||||
Subsequent Event [Member] | B N I Subsidiary [Member] | |||||||||
Subsequent Event [Line Items] | |||||||||
Amendment to 10% secured promissory notes, Description | On November 18, 2022, the Company’s BNI subsidiary entered into an amendment to the 10% secured promissory notes issued on August 10, 2022, whereby the investors permitted the Company to (i) elect to utilize one of the six monthly forbearances under the notes for the November 2022 monthly payment and (ii) make the forbearance payment with the December 2022 monthly payment. | ||||||||
Subsequent Event [Member] | Secured Debt [Member] | |||||||||
Subsequent Event [Line Items] | |||||||||
Subsequent Event, Description | the Company and certain of its subsidiaries borrowed $18.9 million of principal amount of term loans (the “Loans”) from a group of institutional investors (the “Financing”). The Loans mature in 18 months, which may be extended to 24 months, accrue interest at the rate of 8.5% per annum and are secured by certain assets of the Company and various subsidiaries. Starting in January 2023, the lenders have the right to require the Company to make monthly payments of $0.6 million, which will increase to $1.1 million in November 2023. The Loans were issued with an original issue discount of $1.89 million. | ||||||||
Warrants receive | 4,500,000 | ||||||||
Price per share | $ 0.75 | $ 0.75 | |||||||
Subsequent Event [Member] | Secured Debt [Member] | Common Stock [Member] | |||||||||
Subsequent Event [Line Items] | |||||||||
Warrants receive | 4,500,000 | ||||||||
Price per share | $ 0.45 | $ 0.45 | |||||||
Subsequent Event [Member] | Sales Agreement [Member] | Common ATM Offering [Member] | |||||||||
Subsequent Event [Line Items] | |||||||||
Sold an aggregate shares | 14,800,000 | ||||||||
Gross Proceeds from Issuance or Sale of Equity | $ 2,600,000 | ||||||||
Subsequent Event [Member] | Sales Agreement [Member] | Preferred ATM Offering [Member] | |||||||||
Subsequent Event [Line Items] | |||||||||
Sold an aggregate shares | 8,933 | ||||||||
Gross Proceeds from Issuance or Sale of Equity | $ 124,000 | ||||||||
Subsequent Event [Member] | Securities Purchase Agreement [Member] | |||||||||
Subsequent Event [Line Items] | |||||||||
Subsequent Event, Description | During the period between October 1, 2022 through November 18, 2022, Ault Lending purchased an additional | ||||||||
Subsequent Event [Member] | SMC Credit and Security Agreement with Fifth Third Bank [Member] | |||||||||
Subsequent Event [Line Items] | |||||||||
Subsequent Event, Description | The credit agreement provides for a three-year secured revolving credit facility in an aggregate principal amount of up to $15 million decreased to $7.5 million during the non-peak period of January 1 through July 31 of each year. The credit agreement matures on October 14, 2025. | ||||||||
Percent of inventory advance | 85% | ||||||||
Inventory advance | 85% | ||||||||
Interest rate | $ 4,000,000 | ||||||||
Subsequent Event [Member] | SMC Credit and Security Agreement with Fifth Third Bank [Member] | Prime Rate [Member] | |||||||||
Subsequent Event [Line Items] | |||||||||
Interest rate | 0.50% | ||||||||
Subsequent Event [Member] | SMC Credit and Security Agreement with Fifth Third Bank [Member] | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate [Member] | |||||||||
Subsequent Event [Line Items] | |||||||||
Interest rate | 3% | ||||||||
Subsequent Event [Member] | Purchase Agreement [Member] | B N I Subsidiary [Member] | |||||||||
Subsequent Event [Line Items] | |||||||||
Subsequent Event, Description | The maturity date of the secured promissory notes is May 18, 2023. When the Company sells the Collateral, the Company is required to make a payment towards the secured promissory notes equal to 45% of the realized gains. After the secured promissory notes have been repaid in full and until all of the Collateral is sold, when the Company sells any remaining Collateral, the Company is required to give the investors a profits participation interest equal to 45% of the realized gains. | ||||||||
Interest rate | 3% | 3% | 3% | ||||||
Purchase price | $ 8,181,819 | ||||||||
Proceeds to company for the secured promissory notes | $ 8,200,000 |