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 UNITED STATES SECURITIES AND EXCHANGE COMMISSION

 Washington, D.C. 20549

 FORM 10-K/A

 (Amendment No. 1)

 x ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 For the Fiscal Year Ended December 31, 2023

 or

 TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 For
the transition period from _____________ to ________________

 Commission file number 1-12711

 HYPERSCALE
DATA, INC.

 (Exact name of registrant as specified in its charter)

 Delaware

 94-1721931

 (State or other jurisdiction of incorporation or organization)

 (I.R.S. Employer Identification Number)

 11411 Southern Highlands Pkwy, Suite 240,

 Las Vegas, NV

 89141

 (949) 444-5464

 (Address of principal executive offices)

 (Zip Code)

 (Registrant's telephone number, including area code)

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

 Title of each class

 Trading symbol(s)

 Name of each exchange on which registered

 Common Stock, $0.001 par value per share

 GPUS

 NYSE American

 13.00% Series D Cumulative Redeemable Perpetual Preferred Stock, par value $0.001 per share

 GPUS
 PRD

 NYSE American

 Securities registered pursuant to Section 12(g)
of the Act: None

by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No

by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange
Act. Yes No

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

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

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

 Large accelerated filer

 Accelerated filer

 Non-accelerated filer

 Smaller reporting company

 Emerging growth company

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

by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of
its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public
accounting firm that prepared or issued its audit report.

 If securities are registered pursuant to Section
12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction
of an error to previously issued financial statements.

 Indicate by check mark whether any of those error
corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's
executive officers during the relevant recovery period pursuant to §240.10D-1(b).

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

 As of June 30, 2023, the aggregate market value
of the registrant's common stock held by non-affiliates of the registrant was $ 6.3 million based on the closing sale price
as reported on the NYSE American of $118.7151. Shares of the registrant's common stock held by executive officers, directors
or 10% beneficial owners and by each other person who may be deemed to be an affiliate of the registrant have been excluded from this
computation. This calculation does not reflect a determination that certain persons are affiliates of the registrant for any other purpose.

 There were 30,065,399
 shares of common stock outstanding as of April 15, 2024.

 Documents incorporated by reference: None

 EXPLANATORY NOTE

 Hyperscale Data, Inc. (formerly known as Ault
Alliance, Inc.) (the "Company") is filing this Amendment No. 1 on Form 10-K/A (the "Amendment") to its Annual
Report on Form 10-K for the fiscal year ended December 31, 2023 (the "Original Filing"), which was filed with the Securities
and Exchange Commission ("SEC") on April 16, 2024, solely to correct typographical errors in the Report of Independent
Registered Public Accounting Firm included in Item 8 of Part II of the Original Filing (the "Audit Reports"). The corrections
to the Audit Reports were the result of inadvertent typographical errors included in the Original Filing.

 As required by Rule 12b-15 under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), because the Original Report was included within Item 8 of the Original
Form 10-K, this Amendment sets forth Item 8 in its entirety. Except for the correction made to the Report of Independent Registered Public
Accounting Firm in the Original Report noted above, no revisions or modifications have been made to the financial statements or any other
information contained within Item 8 of the Original Form 10-K.

 Additionally, in accordance with Rule 12b-15,
the Company is including with this Amendment currently dated certifications from its Chief Executive Officer and Chief Financial Officer.
These certifications are filed or furnished, as applicable, as Exhibits 31.1, 31.2, and 32.1. The Company is also filing updated consents
from Marcum LLP and Ziv Haft, BDO member firm, as Exhibits 23.1 and 23.2, respectively. This Amendment consists solely of the preceding
cover page, this explanatory note, the complete text of Item 8, the complete text of Part IV, Item 15, "Exhibits and Financial
Statement Schedules," the signature page, the certifications, and the updated Marcum LLP and Ziv Haft, BDO member firm, consents,

 On September 10, 2024, the Company changed
its name to Hyperscale Data, Inc. and its ticker was changed to "GPUS." The name change did not affect the rights of security
holders of the Company. Except for changing the Company name on the cover page of this Amendment, the signature page to this Amendment
and the certifications filed as exhibits hereto, the name of the Company reflected in this Amendment is to the former name, Ault Alliance,
Inc. In addition, the exhibit index was revised solely to indicate that certain exhibits listed therein were previously filed with the
Original Filing and have not been filed with this Amendment.

 Except as noted above, the information contained
in this Amendment does not update or reflect events occurring after the filing of the Original Form 10-K. This Amendment should be read
in conjunction with the Company's other filings with the SEC, including the Original Form 10-K.

 Page

 Item 8.

 Financial Statements and Supplementary Data

 F-1 – F-54

 Item 15.

 Exhibits and Financial Statement Schedules

 Signatures

 ITEM 15.
 EXHIBITS

 Exhibit

 Description

 2.1

 Agreement and Plan of Merger dated January 7, 2021. Incorporated by reference to the Current Report on Form 8-K filed on January 19, 2021 as Exhibit 3.1 thereto.

 2.2

 Agreement and Plan of Merger dated December 1, 2021. Incorporated by reference to the Current Report on Form 8-K filed on December 13, 2021 as Exhibit 2.1 thereto.

 2.3

 Agreement and Plan of Merger dated December 20, 2022. Incorporated by reference to the Current Report on Form 8-K filed on December 21, 2022 as Exhibit 2.1 thereto.

 3.1

 Certificate of Incorporation, dated September 22, 2017. Incorporated herein by reference to the Current Report on Form 8-K filed on December 29, 2017 as Exhibit 3.1 thereto.

 3.2

 Certificate of Designations of Rights and Preferences of 10% Series A Cumulative Redeemable Perpetual Preferred Stock, dated September 13, 2018. Incorporated herein by reference to the Current Report on Form 8-K filed on September 14, 2018 as Exhibit 3.1 thereto.

 3.3

 Certificate of Amendment to Certificate of Incorporation, dated January 2, 2019. Incorporated by reference to the Current Report on Form 8-K filed on January 3, 2019 as Exhibit 3.1 thereto.

 3.4

 Certificate of Amendment to Certificate of Incorporation (1-for-20 Reverse Stock Split of Common Stock), dated March 14, 2019. Incorporated herein by reference to the Current Report on Form 8-K filed on March 14, 2019 as Exhibit 3.1 thereto.

 3.5

 Certificate of Ownership and Merger. Incorporated by reference to the Current Report on Form 8-K filed on January 19, 2021 as Exhibit 2.1 thereto.

 3.6

 Certificate of Ownership and Merger, as filed with the Secretary of State of the State of Delaware on December 1, 2021. Incorporated by reference to the Current Report on Form 8-K filed on December 13, 2021 as Exhibit 3.1 thereto.

 3.7

 Certificate of Designation, Preferences and Rights relating to the 13.00% Series D Cumulative Redeemable Perpetual Preferred Stock, dated May 25, 2022. Incorporated by reference to the Registration Statement on Form 8-A filed on May 26, 2022 as Exhibit 3.6 thereto.

 3.8

 Certificate of Increase of the Designated Number of Shares of 13.00% Series D Cumulative Redeemable Perpetual Preferred Stock, dated June 10, 2022. Incorporated by reference to the Current Report on Form 8-K filed on June 14, 2022 as Exhibit 3.1 thereto.

 3.9

 Certificate of Correction to the Certificate of Designation, Rights and Preferences of 13.00% Series D Cumulative Redeemable Perpetual Preferred Stock, dated June 16, 2022. Incorporated by reference to the Current Report on Form 8-K filed on June 17, 2022 as Exhibit 3.1 thereto.

 3.10

 Certificate of Amendment to Certificate of Incorporation (1-for-300 Reverse Stock Split of Common Stock), dated May 15, 2023. Incorporated herein by reference to the Current Report on Form 8-K filed on May 16, 2023 as Exhibit 3.1 thereto.

 3.11

 Certificate of Elimination of the Series E convertible redeemable preferred stock of Ault Alliance, Inc. Incorporated herein by reference to the Current Report on Form 8-K filed on August 18, 2023 as Exhibit 3.1 thereto.

 3.12

 Certificate of Elimination of the Series F convertible redeemable preferred stock of Ault Alliance, Inc. Incorporated herein by reference to the Current Report on Form 8-K filed on August 18, 2023 as Exhibit 3.2 thereto.

 3.13

 Certificate of Elimination of the Series G convertible redeemable preferred stock of Ault Alliance, Inc. Incorporated herein by reference to the Current Report on Form 8-K filed on August 18, 2023 as Exhibit 3.3 thereto.

 3.14

 Certificate of Designation of Preferences, Rights and Limitations of Series C Cumulative Preferred Stock, dated November 15, 2023. Incorporated herein by reference to the Current Report on Form 8-K filed on November 21, 2023 as Exhibit 3.1 thereto.

 3.15

 Certificate of Elimination of the Series B convertible redeemable preferred stock of Ault Alliance, Inc. Incorporated herein by reference to the Current Report on Form 8-K filed on December 12, 2023 as Exhibit 3.1 thereto.

 3.16

 Certificate of Amendment to Certificate of Incorporation filed with the Delaware Secretary of State on January 12, 2024. Incorporated by reference to the Current Report on Form 8-K filed on January 12, 2024 as Exhibit 3.2 thereto.

 3.17

 Second Amended and Restated Bylaws, effective as of January 11, 2024. Incorporated by reference to the Current Report on Form 8-K filed on January 12, 2024 as Exhibit 3.1 thereto.

 3.18

 Certificate of Increase to Certificate Designations of Preferences, Rights and Limitations of Series C Convertible Preferred Stock. Incorporated herein by reference to the Current Report on Form 8-K filed on April 4, 2024 as Exhibit 3.1 thereto.

 4.1

 Form of Warrant, dated as of May 28, 2020. Incorporated by reference to the Current Report on Form 8-K filed on May 29, 2020 as Exhibit 4.3 thereto.

 4.2

 Form of Warrant, dated June 26, 2020. Incorporated by reference to the Current Report on Form 8-K filed on June 29, 2020 as Exhibit 4.2 thereto.

 4.3

 Form of Warrant. Incorporated by reference to the Current Report on Form 8-K filed on July 17, 2020 as Exhibit 4.2 thereto.

 4.4

 Form of Warrant, dated October 22, 2020. Incorporated by reference to the Current Report on Form 8-K filed on October 23, 2020 as Exhibit 4.2 thereto.

 Exhibit

 Description

 4.5

 Form of Warrant dated October 27, 2020. Incorporated by reference to the Current Report on Form 8-K filed on October 27, 2020 as Exhibit 4.3 thereto.

 4.6

 Form of Warrant dated October 27, 2020. Incorporated by reference to the Current Report on Form 8-K filed on October 27, 2020 as Exhibit 4.4 thereto.

 4.7

 Form of Warrant issued to Esousa Holdings, LLC, dated November 19, 2020. Incorporated by reference to the Current Report on Form 8-K filed on November 20, 2020 as Exhibit 4.3 thereto.

 4.8

 Form of Senior Indenture between BitNile Holdings, Inc. and the Trustee. Incorporated by reference to the Registration Statement on Form S-3 filed on October 29, 2021 as Exhibit 4.1 thereto.

 4.9

 Form of Subordinated Indenture between BitNile Holdings, Inc. and the Trustee. Incorporated by reference to the Registration Statement on Form S-3 filed on October 29, 2021 as Exhibit 4.2 thereto.

 4.10

 Form of Class A Warrant, dated December 29, 2021. Incorporated by reference to the Current Report on Form 8-K filed on January 3, 2022 as Exhibit 4.2 thereto.

 4.11

 Form of Class B Warrant, dated December 29, 2021. Incorporated by reference to the Current Report on Form 8-K filed on January 3, 2022 as Exhibit 4.3 thereto.

 4.12

 Form of Note. Incorporated by reference to the Current Report on Form 8-K filed on August 11, 2022 as Exhibit 4.1 thereto.

 4.13

 Form of Class A Warrant. Incorporated by reference to the Current Report on Form 8-K filed on November 8, 2022 as Exhibit 4.1 thereto.

 4.14

 Form of Class B Warrant. Incorporated by reference to the Current Report on Form 8-K filed on November 8, 2022 as Exhibit 4.2 thereto.

 4.15

 Form of Note. Incorporated by reference to the Current Report on Form 8-K filed on December 19, 2022 as Exhibit 4.1 thereto.

 4.16

 Form of amendment #1 to senior secured promissory note. Incorporated by reference to the Quarterly Report on Form 10-Q filed on May 22, 2023 as Exhibit 10.7 thereto.

 4.17

 Form of 7.00% Senior Note due 2024. Incorporated by reference to the Current Report on Form 8-K filed on September 1, 2023 as Exhibit 4.1 thereto.

 4.18

 Form of 8.50% Senior Note due 2026. Incorporated by reference to the Current Report on Form 8-K filed on September 1, 2023 as Exhibit 4.2 thereto.

 4.19

 Form of 10.50% Senior Note due 2028. Incorporated by reference to the Current Report on Form 8-K filed on September 1, 2023 as Exhibit 4.3 thereto.

 4.20

 Form of Note. Incorporated by reference to the Current Report on Form 8-K filed on September 28, 2023 as Exhibit 4.1 thereto.

 4.21

 Form of Warrant issued October 13, 2023. Incorporated by reference to the Current Report on Form 8-K filed on October 16, 2023 as Exhibit 4.2 thereto.

 4.22

 Form of Warrant. Incorporated by reference to the Current Report on Form 8-K filed on November 7, 2023 as Exhibit 10.2 thereto.

 4.23

 Securities Purchase Agreement, dated as of November 14, 2023, by and between Ault Alliance, Inc. and Risk On International, Inc. Incorporated by reference to the Current Report on Form 8-K filed on November 15, 2023 as Exhibit 10.1 thereto.

 4.24

 Form of Certificate of Designations of Rights, Preferences and Limitations of Series D Convertible Preferred Stock of Risk On International, Inc. Incorporated by reference to the Current Report on Form 8-K filed on November 15, 2023 as Exhibit 10.2 thereto.

 4.25

 Note Purchase Agreement, dated March 11, 2024, by and among the Company and the Investors. Incorporated by reference to the Current Report on Form 8-K filed on March 12, 2024 as Exhibit 10.1 thereto.

 4.26

 Form of Note. Incorporated by reference to the Current Report on Form 8-K filed on March 12, 2024 as Exhibit 4.1 thereto.

 4.27+

 Description of Capital Stock.

 10.1

 Loan and Security Agreement between the Company and Avalanche International Corp., dated August 21, 2017. Incorporated by reference to the Current Report on Form 8-K filed on September 7, 2017 as Exhibit 10.1 thereto.

 10.2

 Amendment to MTIX Limited Purchase Order Number 2121. Incorporated by reference to the Current Report on Form 8-K filed on February 25, 2020 as Exhibit 10.2 thereto.

 10.3*

 2021 Stock Incentive Plan. Incorporated by reference to the Company's Definitive Proxy Statement on Form DEF 14A filed on July 6, 2021 as Appendix B thereto.

 10.4*

 2021 Employee Stock Purchase Plan. Incorporated by reference to the Company's Definitive Proxy Statement on Form DEF 14A filed on July 6, 2021 as Appendix C thereto.

 10.5*

 Form of Stock Option Grants. Incorporated by reference to the Company's Registration Statement on Form S-8 filed on August 26, 2021 as Exhibit 99.3 thereto.

 10.6*

 Form of Restricted Stock Unit Grants. Incorporated by reference to the Company's Registration Statement on Form S-8 filed on August 26, 2021 as Exhibit 99.4 thereto.

 Exhibit

 Description

 10.7

 Form of Construction Loan Agreement. Incorporated by reference to the Current Report on Form 8-K filed on December 23, 2021 as Exhibit 10.1 thereto.

 10.8

 Form of Mortgage, Assignment of Rents and Leases, Security Agreement and Fixture Filing. Incorporated by reference to the Current Report on Form 8-K filed on December 23, 2021 as Exhibit 10.2 thereto.

 10.9

 Form of Assignment of Leases, Rents and Profits. Incorporated by reference to the Current Report on Form 8-K filed on December 23, 2021 as Exhibit 10.3 thereto.

 10.10

 Form of Guaranty. Incorporated by reference to the Current Report on Form 8-K filed on December 23, 2021 as Exhibit 10.4 thereto.

 10.11*

 2022 Stock Incentive Plan. Incorporated by reference to the Company's Definitive Proxy Statement on Form DEF 14A filed on September 23, 2022 as Annex B thereto.

 10.12

 Form of Securities Purchase Agreement. Incorporated by reference to the Current Report on Form 8-K filed on December 19, 2022 as Exhibit 10.1 thereto.

 10.13

 Form of Guaranty. Incorporated by reference to the Current Report on Form 8-K filed on December 19, 2022 as Exhibit 10.3 thereto.

 10.14

 Form of Amended and Restated Amendment to Securities Purchase Agreement. Incorporated by reference to the Current Report on Form 8-K filed on January 3, 2023 as Exhibit 10.4 thereto.

 10.15

 Form of Share Exchange Agreement, entered into February 8, 2023. Incorporated by reference to the Current Report on Form 8-K filed on February 10, 2023 as Exhibit 10.1 thereto.

 10.16

 Form of Series B Preferred Stock Certificate of Designations. Incorporated by reference to the Current Report on Form 8-K filed on February 10, 2023 as Exhibit 10.2 thereto.

 10.17

 Form of Series C Preferred Stock Certificate of Designations. Incorporated by reference to the Current Report on Form 8-K filed on February 10, 2023 as Exhibit 10.3 thereto.

 10.18

 Form of Ault Alliance, Inc. Investor Agreement relating to 7.00% Senior Notes due 2024, 8.50% Senior Notes due 2026 and 10.50% Senior Notes due 2028. Incorporated by reference to the Current Report on Form 8-K filed on September 1, 2023 as Exhibit 10.1 thereto.

 10.19

 Securities Exchange Agreement, dated September 27, 2023, by and between the Company and the Investor. Incorporated by reference to the Current Report on Form 8-K filed on September 28, 2023 as Exhibit 10.1 thereto.

 10.20

 Securities Purchase Agreement, dated November 6, 2023, by and between Ault Alliance, Inc. and Ault & Company, Inc. Incorporated by reference to the Current Report on Form 8-K filed on November 7, 2023 as Exhibit 10.1 thereto.

 10.21

 Form of Loan and Guaranty Agreement, dated December 14, 2023. Incorporated by reference to the Current Report on Form 8-K filed on December 15, 2023 as Exhibit 10.1 thereto.

 10.22

 Form of Security Agreement. Incorporated by reference to the Current Report on Form 8-K filed on December 15, 2023 as Exhibit 10.2 thereto.

 10.23

 Form of Security Agreement. Incorporated by reference to the Current Report on Form 8-K filed on December 15, 2023 as Exhibit 10.3 thereto.

 10.24

 Form of Florida Mortgage. Incorporated by reference to the Current Report on Form 8-K filed on December 15, 2023 as Exhibit 10.4 thereto.

 10.25

 Form of Michigan Mortgage. Incorporated by reference to the Current Report on Form 8-K filed on December 15, 2023 as Exhibit 10.5 thereto.

 10.26

 Form of Aircraft Mortgage. Incorporated by reference to the Current Report on Form 8-K filed on December 15, 2023 as Exhibit 10.6 thereto.

 10.27

 Amendment to the Securities Purchase Agreement, Certificate of Designation and Series C Warrants, dated March 25, 2024. Incorporated by reference to the Current Report on Form 8-K filed on March 26, 2024 as Exhibit 10.3 thereto.

 10.28+

 Luxor Mining Pool Service Level Agreement, dated March 28, 2023, by and between Bitnile Inc. (n/k/a Sentinum Inc.) and Luxor Technology Corporation.

 10.29+

 Master Services Agreement, dated March 23, 2023, by and between Bitnile, Inc. (n/k/a Sentinum Inc.) and Core Scientific, Inc.

 10.30

 Amendment to the Loan and Guaranty Agreement, dated April 15, 2024. Incorporated by reference to the Current Report on Form 8-K filed on April 16, 2024 as Exhibit 10.1 thereto.

 21+

 List of subsidiaries.

 23.1**

 Consent of Marcum LLP.

 23.2**

 Consent of Ziv Haft, BDO member firm.

 31.1**

 Certification of Chief Executive Officer required by Rule 13a-14(a) or Rule 15d-14(a).

 31.2**

 Certification of Chief Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a).

 32.1***

 Certification of Chief Executive Officer and Chief Financial Officer required by Rule 13a-14(b) or Rule 15d-14(b) and Section 1350 of Chapter 63 of Title 18 of the United States Code.

 97.1+

 Ault Alliance, Inc. Clawback Policy.

101.INS**

 101.SCH**

 101.CAL**

 101.DEF**

 101.LAB**

 101.PRE**

 +
 Previously filed.

 *
 Indicates management contract or compensatory plan or arrangement.

 **
 Filed herewith.

 ***
 Furnished herewith.

 SIGNATURES

 Pursuant to the requirements of Section 13
or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.

 Dated: September 24, 2024

 HYPERSCALE
 DATA, INC.

 By:

 /s/ William B. Horne

 William B. Horne

 Chief Executive Officer

 (Principal Executive Officer)

 By:

 /s/ Kenneth S. Cragun

 Kenneth S. Cragun

 Chief Financial Officer

 (Principal Financial and Accounting Officer)

 ITEM 8.
 FINANCIAL STATEMENTS

 INDEX TO FINANCIAL STATEMENTS

 Report of Independent Registered Public Accounting Firm – Marcum LLP (PCAOB ID Number 688)

 Report of Independent Registered Public Accounting Firm – Ziv Haft. (PCAOB ID Number 1185)

 Consolidated Balance Sheets as of December 31, 2023 and 2022

 Consolidated Statements of Operations and Comprehensive Loss for the Years Ended December 31, 2023 and 2022

 Consolidated Statements of Changes in Stockholders' Equity for the Years Ended December 31, 2023 and 2022

 Consolidated Statements of Cash Flows for the Years Ended December 31, 2023 and 2022

 Notes to Consolidated Financial Statements

 F-13 – F-54

 F- 1

 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM

 To the Shareholders and Board of Directors
of

 Ault Alliance, Inc. and Subsidiaries

 Opinion on the Financial Statements

 We have audited the accompanying consolidated
balance sheet s of Ault Alliance, Inc. and subsidiaries (the "Company") as of December 31, 2023 and 2022, the related
consolidated statements of operations and comprehensive loss, changes in stockholders' equity and cash flows for each of the two
years in the period ended December 31 2023, and the related notes (collectively referred to as the "financial statements").
In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December
31, 2023 and 2022, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2023,
in conformity with accounting principles generally accepted in the United States of America.

 We did not audit the December 31, 2023 and 2022
financial statements of Enertec Systems 2001 Ltd., a wholly-owned subsidiary, which statements reflect 5% and 3% of the total consolidated
assets as of December 31, 2023 and 2022, respectively, 10% and 11% of the total consolidated revenues for the year ended December 31,
2023 and 2022, respectively. Those statements were audited by other auditors whose report has been furnished to us, and our opinion, insofar
as it relates to the amounts included for Enertec Systems 2001 Ltd., is based solely on the report of the other auditors.

 Explanatory Paragraph – Going Concern

 The accompanying consolidated financial statements
have been prepared assuming that the Company will continue as a going concern. As more fully described in Note 2, the Company has a significant
working capital deficiency, has incurred significant losses and needs to raise additional funds to meet its obligations and sustain its
operations. These conditions raise substantial doubt about the Company's ability to continue as a going concern. Management's
plans in regard to these matters are also described in Note 2. The consolidated financial statements do not include any adjustments that
might result from the outcome of this uncertainty.

 Basis for Opinion

 These financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our
audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB")
and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable
rules and regulations of the Securities and Exchange Commission and the PCAOB.

 We conducted our audits in accordance with
the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether
the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were
we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an
understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the
Company's internal control over financial reporting. Accordingly, we express no such opinion.

 Our audits included performing procedures to assess
the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond
to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating
the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

 Critical Audit Matter

 The critical audit matter communicated below is
a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the
audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially
challenging, subjective, or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on
the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion
on the critical audit matter or on the accounts or disclosures to which it relates.

 F- 2

 Evaluation
of the Accounting for and Disclosure of Bitcoin Mining Revenue

 As disclosed in Note 3, the Company participates
in a digital asset mining pool by providing hash calculation services to the mining pool operator. During the years ended December 31,
2023 and 2022, the Company recognized revenue from bitcoin mining of approximately $33.1 million and $16.7 million, respectively.

 We identified the auditing of revenue recognized
from bitcoin mining as a critical audit matter due to the nature and extent of audit effort required to perform audit procedures over
the completeness and occurrence of bitcoin mining revenue recognized by the Company.

 The primary procedures we performed to address
this critical audit matter included the following:

 We performed site visits of the facilities where the Company's mining hardware is located, which
included observations of the physical controls and mining equipment observation procedures.

 On a sample basis, we tested the hash calculation services contributed by the Company's mining hardware.

 We performed certain substantive analytical procedures developing an expectation for the amount to be
recorded using hash calculation services data, the calculation prescribed in the contract with the mining pool operator and electricity
consumption data and comparing our expectation to the amount recorded by the Company.

 We evaluated and tested management's valuation of bitcoin earned by obtaining independent bitcoin
prices and comparing those to the prices used by the Company.

 We obtained and evaluated the contract with the third-party mining pool operator and independently confirmed
with the third-party mining pool operator the significant contractual terms utilized in the determination of mining revenue, total mining
rewards earned, and the digital asset wallet addresses in which the rewards are deposited.

 We independently obtained evidence from the Bitcoin blockchain to test the occurrence and accuracy of
mining revenue.

 /s/ Marcum llp

 Marcum llp

 We have served as the Company's auditor
since 2016.

 New York, New York

 April 16, 2024

 F- 3

 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM

 To the Board of Directors and Management of Enertec systems 2001 Ltd.

 Karmiel, Israel.

 Opinion on the Financial Statements

 We have audited the statements of financial position of Enertec systems
2001 Ltd. ("the Company") as of December 31, 2023 and 2022, the related statements of comprehensive profit /(loss), changes
in shareholders' equity, and cash flows for each of the years then ended, and the related notes (collectively, the financial statements
(not presented herein)). In our opinion, the financial statements present fairly, in all material respects, the financial position of
the Company at December 31, 2023 and 2022, and the results of its operations and its cash flows for the years then ended, in conformity
with accounting principles generally accepted in the United States of America.

 Basis for Opinion

 These financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We are
a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be
independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of
the Securities and Exchange Commission and the PCAOB.

 We conducted our audits in accordance with the
standards of the PCAOB and in accordance with auditing standards generally accepted in the United States of America. Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement,
whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over
financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but
not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly,
we express no such opinion.

 Our audits included performing procedures to assess
the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond
to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating
the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

 Critical Audit Matter

 The critical audit matter communicated below is
a matter arising from the current period audit of the financial statements that was communicated and that: (1) relates to accounts or
disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.
The communication of critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we
are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts
or disclosures to which it relates.

 Estimation of total contract
costs to be incurred for fixed-price long-term contract revenue

 As described in Note 2 to the financial statements,
the Company recognizes a significant portion of its revenue over time using the cost-to-cost measure of progress, which measures a contract's
progress toward completion based on the ratio of actual contract costs incurred to date to the Company's estimated costs at completion.
The cost estimation process for these contracts is based on the knowledge and experience of the Company's project managers, engineers,
and financial professionals. Changes in job performance, job conditions and management's assessment of expected variable consideration
are factors that influence estimates of the total contract transaction price, total costs to complete those contracts and the Company's
revenue recognition.

 F- 4

 We identified estimated costs to complete on certain
revenue contracts as a critical audit matter. The determination of the total estimated cost and progress toward completion requires management
to make significant estimates and assumptions. Total estimated costs to complete projects include various costs such as direct labor,
material, and subcontract costs. Changes in these estimates can have a significant impact on the revenue recognized each period. Auditing
these estimates involved especially challenging auditor judgment in evaluating the reasonableness of management's assumptions and
estimates over the duration of these contracts.

 The primary procedures we performed to address
this critical audit matter included:

 Examining a sample of revenue contracts to evaluate the appropriateness of the Company's identification
of performance obligations and the determination of method for measuring contract progress.

 Assessing the reasonableness of the estimated costs to complete by selecting a sample of open projects
and (i) testing consistency of the estimated total contract costs projected in the current year versus the original or prior period, (ii)
assessing the status of completion by testing of a sample of project costs incurred to date and interviewing the Company's management
to evaluate progress to date, the estimate of remaining costs to be incurred, and factors impacting the amount of time and cost to complete.

 Assessing the reasonableness of changes in estimated costs to complete by comparing project profitability
estimates in the current period to historical estimates and actual performance and investigating reasons for changes in expected costs
and project margins.

 Evaluating the reasonableness of management's budgeting process by selecting a sample of contract
budgets for projects that were completed during the period and performing a retrospective review of budget to actual variances.

 /S/ Ziv Haft.

 Certified Public Accountants (Isr.)

 BDO Member Firm

 We have served as the Company's auditor since 2012.

 Tel-Aviv, Israel

 April 15, 2024

 F- 5

 CONSOLIDATED BALANCE SHEETS

 2023

 2022

 ASSETS

 CURRENT ASSETS

 $
 8,626,000

 $
 7,942,000

 Restricted cash

 4,966,000

 732,000

 Cash and marketable securities held in trust account

 -

 118,193,000

 Marketable equity securities

 6,590,000

 Accounts receivable, net

 10,839,000

 19,322,000

 8,384,000

 22,036,000

 Investment in promissory notes and other, related party

 3,968,000

 2,868,000

 Loans receivable, current

 1,234,000

 7,593,000

 9,450,000

 5,074,000

 Current assets of discontinued operations

 90,991,000

 5,959,000

 TOTAL CURRENT ASSETS

 138,485,000

 196,309,000

 Cash and marketable securities held in trust account

 -

 Intangible assets, net

 5,754,000

 34,786,000

 6,088,000

 27,902,000

 108,829,000

 146,779,000

 Right-of-use assets

 6,315,000

 8,419,000

 Investments in common stock, related parties

 Investments in other equity securities

 21,767,000

 42,494,000

 Other assets

 9,073,000

 5,841,000

 Non-current assets of discontinued operations

 -

 92,535,000

 TOTAL ASSETS

 $
 299,190,000

 $
 561,514,000

 LIABILITIES AND STOCKHOLDERS' EQUITY

 CURRENT LIABILITIES

 $
 66,443,000

 $
 60,428,000

 Operating lease liability, current

 2,119,000

 2,975,000

 Notes payable, current

 12,866,000

 39,621,000

 Notes payable, related party, current

 2,375,000

 352,000

 Convertible notes payable, current

 11,763,000

 1,325,000

 Redeemable non-controlling interests in equity of subsidiaries

 -

 117,993,000

 Guarantee liability

 38,900,000

 -

 Current liabilities of discontinued operations

 70,361,000

 2,631,000

 TOTAL CURRENT LIABILITIES

 204,827,000

 225,325,000

 F- 6

 CONSOLIDATED BALANCE SHEETS (continued)

 2023

 2022

 LONG TERM LIABILITIES

 Operating lease liability, non-current

 4,402,000

 5,836,000

 Notes payable, non-current

 18,158,000

 29,831,000

 Convertible notes payable, non-current

 9,453,000

 11,451,000

 Deferred underwriting commissions of Ault Disruptive Technologies Corporation ("Ault Disruptive") subsidiary

 3,450,000

 3,450,000

 Non-current liabilities of discontinued operations

 -

 61,633,000

 TOTAL LIABILITIES

 240,290,000

 337,526,000

 COMMITMENTS AND CONTINGENCIES

 Redeemable non-controlling interests in equity of subsidiaries

 2,224,000

 -

 STOCKHOLDERS' EQUITY

 Series A Convertible Preferred Stock, $ 25 stated value per share, $ 0.001 par value – 1,000,000 shares authorized; 7,040 shares issued and outstanding at December 31, 2023 and December 31, 2022 (liquidation preference of $ 176,000 as of December 31, 2023 and December 31, 2022)

 -

 -

 Series B Convertible Preferred Stock, $ 10 stated value per share, share, $ 0.001 par value – 500,000 shares authorized; 0 and 125,000 shares issued and outstanding at December 31, 2023 and 2022, respectively (liquidation preference of $ 0 and $ 1,190,000 at December 31, 2023 and 2022, respectively)

 -

 -

 Series C Convertible Preferred Stock, $ 1,000 stated value per share, share, $ 0.001 par value – 50,000 shares authorized; 41,500 and 0 shares issued and outstanding at December 31, 2023 and December 31, 2022, respectively (liquidation preference of $ 41,500,000 at December 31, 2023)

 -

 -

 Series D Cumulative Redeemable Perpetual Preferred Stock, $ 25 stated value per share, $ 0.001 par value – 2,000,000 shares authorized; 425,197 shares and 172,838 shares issued and outstanding at December 31, 2023 and December 31, 2022, respectively (liquidation preference of $ 10,630,000 and $ 4,321,000 as of December 31, 2023 and December 31, 2022, respectively)

 -

 -

 Class A Common Stock, $ 0.001 par value – 500,000,000 shares authorized; 4,483,459 and 50,966 shares issued and outstanding at December 31, 2023 and December 31, 2022, respectively

 4,000

 -

 Class B Common Stock, $ 0.001 par value – 25,000,000 shares authorized; 0 shares issued and outstanding at December 31, 2023 and December 31, 2022

 -

 -

 Additional paid-in capital

 644,852,000

 565,905,000

 Accumulated deficit

 ( 567,469,000
)

 ( 329,078,000
)

 Accumulated other comprehensive loss

 ( 2,097,000
)

 ( 1,100,000
)

 Treasury stock, at cost

 ( 30,571,000
)

 ( 29,235,000
)

 TOTAL AULT ALLIANCE STOCKHOLDERS' EQUITY

 44,719,000

 206,492,000

 Non-controlling interest

 11,957,000

 17,496,000

 TOTAL STOCKHOLDERS' EQUITY

 56,676,000

 223,988,000

 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

 $
 299,190,000

 $
 561,514,000

 F- 7

 CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE
LOSS

 2023

 2022

 Revenue

 $
 76,137,000

 $
 61,561,000

 Revenue, digital currencies mining

 Revenue, crane operations

)

 156,444,000

 117,637,000

 Cost of revenue, products

 57,788,000

 44,508,000

 Cost of revenue, digital currencies mining

 36,446,000

 21,508,000

 Cost of revenue, crane operations

 29,971,000

 940,000

 Cost of revenue, lending and trading activities

 1,180,000

 -

 Total cost of revenue

 125,385,000

 66,956,000

 Gross profit

 31,059,000

 50,681,000

 Operating expenses

 Research and development

 7,234,000

 2,773,000

 Selling and marketing

 33,529,000

 29,364,000

 General and administrative

 77,806,000

 60,302,000

 Impairment of goodwill and intangible assets

 47,561,000

 13,064,000

 18,161,000

 79,556,000

 Impairment of deposit due to vendor bankruptcy filing

 -

 2,000,000

 489,000

 Total operating expenses

 184,780,000

 190,158,000

 Loss from operations

 ( 153,721,000
)

 ( 139,477,000
)

 Other income (expense):

 Interest and other income

 5,294,000

 2,594,000

 ( 36,595,000
)

 ( 37,342,000
)

 Interest expense, related party

 ( 664,000
)

 -

 Other expense, guarantee

 ( 35,400,000
)

 -

 Loss on extinguishment of debt

 ( 8,719,000
)

 -

 Loss on extinguishment of debt, related party

 ( 4,164,000
)

 -

 Loss from investment in unconsolidated entity

 ( 302,000
)

 ( 924,000
)

 Loss on deconsolidation of subsidiary

 ( 3,040,000
)

 -

 Impairment of equity securities

 ( 9,555,000
)

 ( 11,500,000
)

 Gain from bargain purchase of business

 -

 806,000

 Gain on the sale of fixed assets

 2,069,000

 -

 Change in fair value of warrant and derivative liabilities

 4,544,000

 ( 2,580,000
)

 Total other expense, net

 ( 86,532,000
)

 ( 48,946,000
)

 Loss before income taxes

 ( 240,253,000
)

 ( 188,423,000
)

 Income tax provision (benefit)

 337,000

 ( 4,485,000
)

 Net loss from continuing operations

 ( 240,590,000
)

 ( 183,938,000
)

 Net loss from discontinued operations

 ( 15,704,000
)

 ( 5,895,000
)

 ( 256,294,000
)

 ( 189,833,000
)

 Net loss attributable to non-controlling interest

 25,268,000

 8,017,000

 Net loss attributable to Ault Alliance, Inc.

 ( 231,026,000
)

 ( 181,816,000
)

 Preferred dividends

 ( 1,375,000
)

 ( 393,000
)

 Net loss available to common stockholders

 $
 ( 232,401,000
)

 $
 ( 182,209,000
)

 Basic and diluted net loss per common share:

 Continuing operations

 $
 ( 306.07
)

 $
 ( 5,877.13
)

 Discontinued operations

 ( 22.18
)

 ( 196.50
)

 Net loss per common share

 $
 ( 328.25
)

 $
 ( 6,073.63
)

 Weighted average basic and diluted common shares outstanding

 708,000

 30,000

 Comprehensive loss

 Net loss available to common stockholders

 $
 ( 232,401,000
)

 $
 ( 182,209,000
)

 Foreign currency translation adjustment

 ( 997,000
)

 ( 995,000
)

 Other comprehensive loss

 ( 997,000
)

 ( 995,000
)

 Total comprehensive loss

 $
 ( 233,398,000
)

 $
 ( 183,204,000
)

 F- 8

 CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS'
EQUITY

 Accumulated

 Preferred Stock

 Additional

 Other

 Non-

 Total

 Series A

 Series B

 Series C

 Series D

 Class A Common Stock

 Paid-In

 Accumulated

 Comprehensive

 Controlling

 Treasury

 Stockholders'

 Amount

 Capital

 Deficit

 Loss

 Stock

 Equity

 BALANCES, January 1, 2023

 7,040

 $
 -

 125,000

 $
 -

 -

 $
 -

 172,838

 $
 -

 50,966

 $
 -

 $
 565,905,000

 $
 ( 329,078,000
)

 $
 ( 1,100,000
)

 $
 17,496,000

 $
 ( 29,235,000
)

 $
 223,988,000

 Issuance of Class A common stock for restricted stock awards

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 Issuance of Series C preferred stock, related party

 -

 -

 -

 -

 41,500

 -

 -

 -

 -

 -

 27,042,000

 -

 -

 -

 -

 27,042,000

 Fair value of warrants issued in connection with Series C preferred stock, related party

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 10,958,000

 -

 -

 -

 -

 10,958,000

 Series C preferred stock issuance costs

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 ( 500,000
)

 -

 -

 -

 -

 ( 500,000
)

 Issuance of Series D preferred stock

 -

 -

 -

 -

 -

 -

 252,359

 -

 -

 -

 2,982,000

 -

 -

 -

 -

 2,982,000

 Series D preferred stock offering costs

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 ( 105,000
)

 -

 -

 -

 -

 ( 105,000
)

 Series B preferred stock exchanged for convertible note, related party

 -

 -

 ( 125,000
)

 -

 -

 -

 -

 -

 -

 -

 ( 1,190,000
)

 -

 -

 -

 -

 ( 1,190,000
)

 Stock-based compensation

 6,615,000

 -

 -

 4,253,000

 -

 10,868,000

 Issuance of Class A common stock for cash

 -

 -

 -

 -

 -

 -

 -

 -

 4,340,336

 4,000

 39,411,000

 -

 -

 -

 -

 39,415,000

 Financing cost in connection with sales of Class A common stock

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 ( 1,344,000
)

 -

 -

 -

 -

 ( 1,344,000
)

 Issuance of Class A common stock for conversion of preferred stock liabilities

 -

 -

 -

 -

 -

 -

 -

 -

 5,736

 -

 912,000

 -

 -

 -

 -

 912,000

 Issuance of Class A common stock for conversion of debt

 -

 -

 -

 -

 -

 -

 -

 -

 84,632

 -

 527,000

 -

 -

 -

 -

 527,000

 Class A common stock issued in connection with issuance of notes payable

 -

 -

 -

 -

 -

 -

 -

 -

 1,590

 -

 162,000

 -

 -

 -

 -

 162,000

 Warrants issued in connection with issuance of convertible notes payable, related party

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 4,164,000

 -

 -

 -

 -

 4,164,000

 Remeasurement of Ault Disruptive subsidiary temporary equity

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 ( 5,990,000
)

 -

 -

 -

 ( 5,990,000
)

 Increase in ownership interest of subsidiary

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 13,000

 -

 -

 ( 1,086,000
)

 -

 ( 1,073,000
)

 Non-controlling interest in Risk On International, Inc. ("ROI") subsidiary acquired

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 6,357,000

 -

 6,357,000

 Non-controlling interest in Eco Pack Technologies Limited ("Eco Pack") subsidiary acquired

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 856,000

 -

 856,000

 Sale of subsidiary stock to non-controlling interests

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 7,342,000

 -

 7,342,000

 Distribution to Circle 8 Crane Services, LLC ("Circle 8") non-controlling interest

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 ( 729,000
)

 -

 ( 729,000
)

 Deconsolidation of The Singing Machine Company, Inc. ("SMC")

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 ( 7,966,000
)

 -

 ( 7,966,000
)

 Purchase of treasury stock - Ault Alpha LP ("Ault Alpha")

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 ( 1,336,000
)

 ( 1,336,000
)

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 ( 231,026,000
)

 -

 -

 -

 ( 231,026,000
)

 Preferred dividends

 -

 -

 -

 -

 -

 -

 -

 ( 1,375,000
)

 -

 -

 -

 ( 1,375,000
)

 Foreign currency translation adjustments

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 ( 997,000
)

 -

 -

 ( 997,000
)

 Net loss attributable to non-controlling interest

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 ( 25,268,000
)

 -

 ( 25,268,000
)

 Distribution of securities of TurnOnGreen, Inc. ("TurnOnGreen") to Ault Alliance Class A common stockholders ($2.02 per share)

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 ( 10,700,000
)

 -

 -

 10,700,000

 -

 -

 Other

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 2,000

 2,000

 BALANCES, December 31, 2023

 7,040

 $
 -

 -

 $
 -

 41,500

 $
 -

 425,197

 $
 -

 4,483,459

 $
 4,000

 $
 644,852,000

 $
 ( 567,469,000
)

 $
 ( 2,097,000
)

 $
 11,957,000

 $
 ( 30,571,000
)

 $
 56,676,000

 F- 9

 CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS'
EQUITY

 Preferred Stock

 Additional

 Other

 Non-

 Total

 Series A

 Series B

 Series D

 Class A Common Stock

 Paid-In

 Accumulated

 Comprehensive

 Controlling

 Treasury

 Stockholders'

 Amount

 Capital

 Deficit

 Loss

 Stock

 Equity

 BALANCES, January 1, 2022

 7,040

 $
 -

 125,000

 $
 -

 -

 $
 -

 11,246

 $
 -

 $
 385,728,000

 $
 ( 145,600,000
)

 $
 ( 106,000
)

 $
 1,613,000

 $
 ( 13,180,000
)

 $
 228,455,000

 Issuance of Class A common stock for restricted stock awards

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 Series D preferred stock issued for cash

 -

 -

 -

 -

 172,838

 -

 -

 -

 4,321,000

 -

 -

 -

 -

 4,321,000

 Series D preferred stock offering costs

 -

 -

 -

 -

 -

 -

 -

 -

 ( 811,000
)

 -

 -

 -

 -

 ( 811,000
)

 Stock-based compensation

 -

 -

 6,363,000

 -

 -

 839,000

 -

 7,202,000

 Issuance of Gresham Worldwide common stock for Gresham Worldwide, Inc., formerly known as Giga-tronics Incorporated ("GIGA") acquisition

 -

 -

 -

 -

 -

 -

 -

 -

 1,669,000

 -

 -

 -

 -

 1,669,000

 Issuance of Class A common stock for cash

 -

 -

 -

 -

 -

 -

 38,048

 -

 172,253,000

 -

 -

 -

 -

 172,253,000

 Financing cost in connection with sales of Class A common stock

 -

 -

 -

 -

 -

 -

 -

 -

 ( 4,210,000
)

 -

 -

 -

 -

 ( 4,210,000
)

 Issuance of Class A common stock upon exercise of warrants

 -

 -

 -

 -

 -

 -

 1,547

 -

 1,196,000

 -

 -

 -

 -

 1,196,000

 Fair value of warrants issued in connection with notes payable

 -

 -

 -

 -

 -

 -

 -

 -

 1,296,000

 -

 -

 -

 -

 1,296,000

 Remeasurement of Ault Disruptive subsidiary temporary equity

 -

 -

 -

 -

 -

 -

 -

 -

 -

 ( 1,268,000
)

 -

 -

 -

 ( 1,268,000
)

 Increase in ownership interest of subsidiary

 -

 -

 -

 -

 -

 -

 -

 -

 ( 1,900,000
)

 -

 -

 ( 2,365,000
)

 -

 ( 4,265,000
)

 Non-controlling interest from Avalanche International Corp. ("AVLP") acquisition

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 7,790,000

 -

 7,790,000

 Non-controlling interest from SMC acquisition

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 10,336,000

 -

 10,336,000

 Non-controlling interest from GIGA acquisition

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 2,735,000

 -

 2,735,000

 Non-controlling interest from Circle 8 acquisition

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 4,565,000

 -

 4,565,000

 Purchase of treasury stock - Ault Alpha

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 ( 16,054,000
)

 ( 16,054,000
)

 -

 -

 -

 -

 -

 -

 -

 -

 -

 ( 181,816,000
)

 -

 -

 -

 ( 181,816,000
)

 Preferred dividends

 -

 -

 -

 -

 -

 -

 ( 393,000
)

 -

 -

 -

 ( 393,000
)

 Foreign currency translation adjustments

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 ( 995,000
)

 -

 -

 ( 995,000
)

 Net loss attributable to non-controlling interest

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 ( 8,017,000
)

 -

 ( 8,017,000
)

 Other

 -

 -

 -

 -

 -

 -

 -

 -

 -

 ( 1,000
)

 1,000

 -

 ( 1,000
)

 ( 1,000
)

 BALANCES, December 31, 2022

 7,040

 $
 -

 125,000

 $
 -

 172,838

 $
 -

 50,966

 $
 -

 $
 565,905,000

 $
 ( 329,078,000
)

 $
 ( 1,100,000
)

 $
 17,496,000

 $
 ( 29,235,000
)

 $
 223,988,000

 F- 10

 CONSOLIDATED STATEMENTS OF CASH FLOWS

 For the Year Ended December 31,

 2023

 2022

 Cash flows from operating activities:

 $
 ( 256,294,000
)

 $
 ( 189,833,000
)

 Net loss from discontinued operations

 ( 15,704,000
)

 ( 5,895,000
)

 Net loss from continuing operations

 ( 240,590,000
)

 ( 183,938,000
)

 Adjustments to reconcile net loss to net cash provided by operating activities:

 Depreciation and amortization

 26,974,000

 14,676,000

 Amortization of debt discount

 21,507,000

 29,581,000

 Amortization of right-of-use assets

 2,882,000

 1,745,000

 Other expense, guarantee

 35,400,000

 -

 Deferred tax benefit

 -

 ( 5,000,000
)

 Impairment of goodwill and intangible assets

 47,561,000

 13,064,000

 18,161,000

 79,556,000

 Stock-based compensation

 10,868,000

 7,202,000

 Impairment of deposit due to vendor bankruptcy filing

 2,000,000

 Accretion of original issue discount on notes receivable

 -

 ( 5,549,000
)

 Gain on the sale of fixed assets

 ( 2,069,000
)

 -

 Impairment of equity securities

 15,755,000

 11,500,000

 Impairment of digital currencies

 489,000

 Realized gain on the sale of digital currencies

 ( 520,000
)

 ( 1,045,000
)

 Revenue, digital currencies mining

 ( 33,107,000
)

 ( 16,693,000
)

 Realized gains on sale of marketable securities

 ( 8,437,000
)

 ( 12,111,000
)

 Unrealized (gains) losses on marketable securities

 ( 2,509,000
)

 13,889,000

 Unrealized losses on investments in common stock, related parties

 5,785,000

 11,682,000

 Unrealized gains on equity securities

 -

 ( 41,994,000
)

 Income from cash held in trust

 ( 2,590,000
)

 -

 Loss from investment in unconsolidated entity

 302,000

 924,000

 Loss on remeasurement of investment in unconsolidated entity

 -

 2,700,000

 Provision for loan losses

 1,180,000

 -

 Change in the fair value of warrant and derivative liabilities

 ( 4,544,000
)

 1,672,000

 Loss on extinguishment of debt

 12,883,000

 -

 Loss on deconsolidation of subsidiary

 3,040,000

 -

 Other

 ( 1,173,000
)

 ( 1,004,000
)

 Changes in operating assets and liabilities:

 Proceeds from the sale of digital currencies

 29,111,000

 15,832,000

 Marketable equity securities

 46,457,000

 78,951,000

 ( 415,000
)

 ( 58,000
)

 4,312,000

 ( 1,068,000
)

 3,214,000

 3,802,000

 Other assets

 ( 3,232,000
)

 ( 3,969,000
)

 15,662,000

 9,466,000

 Lease liabilities

 ( 3,187,000
)

 ( 1,919,000
)

 Net cash (used in) provided by operating activities from continuing operations

 ( 830,000
)

 26,993,000

 Net cash used in operating activities from discontinued operations

 ( 4,598,000
)

 ( 504,000
)

 Net cash (used in) provided by operating activities

 ( 5,428,000
)

 26,489,000

 Cash flows from investing activities:

 Purchase of property and equipment

 ( 8,666,000
)

 ( 99,305,000
)

 Investment in promissory notes and other, related parties

 -

 ( 2,200,000
)

 Investments in common stock and warrants, related parties

 -

 ( 4,901,000
)

 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

 Purchase of Circle 8, net of cash received

 -

 ( 11,101,000
)

 Purchase of Eco Pack, net of cash received

 ( 132,000
)

 -

 Cash decrease upon deconsolidation of subsidiary

 ( 6,285,000
)

 -

 Acquisition of non-controlling interests

 ( 1,072,000
)

 ( 4,265,000
)

 Purchase of marketable equity securities

 -

 ( 2,017,000
)

 Sales of marketable equity securities

 -

 11,748,000

 Investments in loans receivable

 ( 501,000
)

 ( 11,309,000
)

 Principal payments on loans receivable

 -

 11,050,000

 Investments in non-marketable equity securities

 ( 10,952,000
)

 ( 26,551,000
)

 Proceeds from the sale of fixed assets

 4,515,000

 -

 Other

 ( 78,000
)

 -

 Net cash used in investing activities from continuing operations

 ( 23,171,000
)

 ( 149,532,000
)

 Net cash used in investing activities from discontinued operations

 ( 6,347,000
)

 ( 9,111,000
)

 Net cash used in investing activities

 ( 29,518,000
)

 ( 158,643,000
)

 F- 11

 CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)

 For the Year Ended December 31,

 2023

 2022

 Cash flows from financing activities:

 Gross proceeds from sales of Class A common stock

 $
 39,415,000

 $
 172,253,000

 Financing cost in connection with sales of Class A common stock

 ( 1,344,000
)

 ( 4,210,000
)

 Proceeds from sales of Series D preferred stock

 2,983,000

 4,321,000

 Financing cost in connection with sales of Series D preferred stock

 ( 105,000
)

 ( 811,000
)

 Proceeds from sales of Series C preferred stock, related party

 3,841,000

 -

 Financing cost in connection with sales of Series C preferred stock, related party

 ( 500,000
)

 -

 Proceeds from subsidiaries' sale of stock to non-controlling interests

 7,342,000

 -

 Distribution to Circle 8 non-controlling interest

 ( 729,000
)

 -

 Proceeds from notes payable

 38,782,000

 53,314,000

 Proceeds from convertible notes payable, related party

 4,625,000

 -

 Proceeds from notes payable, related party

 2,337,000

 -

 Repayment of margin accounts

 ( 767,000
)

 ( 17,721,000
)

 Payments on notes payable

 ( 65,049,000
)

 ( 73,927,000
)

 Payments on convertible notes payable, related party

 ( 150,000
)

 -

 Payments on notes payable, related party

 ( 314,000
)

 -

 Payments of preferred dividends

 ( 1,375,000
)

 ( 393,000
)

 Purchase of treasury stock

 ( 1,336,000
)

 ( 16,054,000
)

 Proceeds from sales of convertible notes

 5,165,000

 -

 Payments on convertible notes

 ( 1,022,000
)

 -

 Net cash provided by financing activities from continuing operations

 31,799,000

 116,772,000

 Net cash provided by financing activities from discontinued operations

 5,237,000

 7,340,000

 Net cash provided by financing activities

 37,036,000

 124,112,000

 Effect of exchange rate changes on cash and cash equivalents

 ( 776,000
)

 864,000

 Net increase (decrease in cash and cash equivalents and restricted cash

 1,314,000

 ( 7,178,000
)

 Cash and cash equivalents and restricted cash at beginning of period - continuing operations

 8,674,000

 14,842,000

 Cash and cash equivalents and restricted cash at beginning of period - discontinued operations

 5,381,000

 6,391,000

 Cash and cash equivalents and restricted cash at beginning of period

 14,055,000

 21,233,000

 Cash and cash equivalents and restricted cash at end of period

 15,369,000

 14,055,000

 Less cash and cash equivalents and restricted cash of discontinued operations at end of period

 ( 1,777,000
)

 ( 5,381,000
)

 Cash and cash equivalents and restricted cash of continued operations at end of period

 $
 13,592,000

 $
 8,674,000

 Supplemental disclosures of cash flow information:

 Cash paid during the period for interest - continuing operations

 $
 4,744,000

 $
 8,294,000

 Cash paid during the period for interest - discontinued operations

 $
 7,506,000

 $
 4,813,000

 Non-cash investing and financing activities:

 Settlement of accounts payable with digital currency

 $
 28,000

 $
 418,000

 Conversion of investment in unconsolidated entity for acquisition of AVLP

 $
 -

 $
 20,706,000

 Conversion of convertible notes payable, related party into shares of Class A common stock

 $
 400,000

 $
 400,000

 Conversion of debt and equity securities to marketable securities

 $
 23,703,000

 $
 44,782,000

 Conversion of loans receivable to marketable securities

 $
 5,430,000

 $
 11,502,000

 Conversion of interest receivable to marketable securities

 $
 -

 $
 386,000

 Recognition of new operating lease right-of-use assets and lease liabilities

 $
 4,372,000

 $
 2,198,000

 Remeasurement of Ault Disruptive temporary equity

 $
 5,990,000

 $
 1,268,000

 Preferred stock exchanged for notes payable

 $
 9,224,000

 $
 -

 Notes payable exchanged for notes payable, related party

 $
 11,645,000

 $
 -

 Redeemable non-controlling interests in equity of subsidiaries paid with cash and marketable securities held in trust account

 $
 120,064,000

 $
 -

 Dividend paid in TurnOnGreen common stock in additional paid-in capital

 $
 10,700,000

 $
 -

 Exchange of notes payable for preferred stock liabilities

 $
 8,437,000

 $
 -

 Exchange of notes payable for preferred stock, related party

 $
 20,194,000

 $
 -

 Exchange of convertible notes payable for preferred stock, related party

 $
 17,370,000

 $
 -

 Exchange of preferred stock for convertible notes payable, related party

 $
 1,250,000

 $
 -

 Fair value of warrants and Class A common stock issued in connection with notes

 $
 -

 $
 2,491,000

 Debt discount from accrued lender profit participation rights

 $
 -

 $
 6,000,000

 Prepaid expenditures capitalized to property and equipment

 $
 -

 $
 2,150,000

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

 F- 12

 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 DECEMBER 31, 2023

 1. DESCRIPTION OF BUSINESS

 Ault
Alliance, Inc., a Delaware corporation ("Ault Alliance" or the "Company") 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 offers colocation and hosting services
for the emerging artificial intelligence ecosystems and other industries, and provides mission-critical products that support a diverse
range of industries, including metaverse platform, oil exploration, crane services, defense/aerospace, industrial, automotive, medical/biopharma,
consumer electronics, hotel operations and textiles. In addition, the Company extends credit to select entrepreneurial businesses through
a licensed lending subsidiary.

 The
Company has the following eight reportable segments:

 Energy and Infrastructure ("Energy") – crane operations, advanced textiles processing
and oil exploration;

 Technology and Finance ("Fintech") – commercial lending, activist investing, stock trading,
media, and digital learning;

 SMC – consumer electronics;

 Sentinum, Inc. ("Sentinum") – digital currencies mining operations and colocation and
hosting services for the emerging artificial intelligence ecosystems and other industries;

 GIGA – defense industry;

 TurnOnGreen – commercial electronics solutions;

 ROI – immersive metaverse platform; and

 Ault Disruptive – a special purpose acquisition company.

 Reverse Stock Splits

 On
May 15, 2023, pursuant to the authorization provided by the Company's stockholders at a special meeting of stockholders, the Company's
board of directors approved an amendment to the Certificate of Incorporation to effectuate a reverse stock split of the Company's
issued and outstanding common stock by a ratio of one-for-three hundred (the " 1-for-300 Reverse Split "). The 1-for-300 Reverse
Split did not affect the number of authorized shares of common stock, preferred stock or their respective par value per share. As a result
of the 1-for-300 Reverse Split, each three hundred shares of common stock issued and outstanding prior to the 1-for-300 Reverse Split
were converted into one share of common stock. The 1-for-300 Reverse Split became effective in the State of Delaware on May 17, 2023.

 On
January 12, 2024, pursuant to the authorization provided by the Company's stockholders at the annual meeting of stockholders, the
Company's board of directors approved an amendment to the Certificate of Incorporation to effectuate a reverse stock split of the
Company's issued and outstanding common stock by a ratio of one-for-twenty-five (the " 1-for-25 Reverse Split "). The
1-for-25 Reverse Split did not affect the number of authorized shares of common stock, preferred stock or their respective par value per
share. As a result of the 1-for-25 Reverse Split, each twenty-five shares of common stock issued and outstanding prior to the 1-for-25
Reverse Split were converted into one share of common stock. The 1-for-25 Reverse Split became effective in the State of Delaware on January
16, 2024.

 All
share amounts in these financial statements have been updated to reflect the 1-for-300 Reverse Split and the 1-for-25 Reverse Split.

 F- 13

 2. LIQUIDITY, GOING CONCERN AND MANAGEMENT'S PLANS

 As of December 31, 2023, the
Company had cash and cash equivalents of $ 8.6 million (excluding cash of discontinued operations), negative working capital of $ 66.3 million
and a history of net operating losses. The Company has financed its operations principally through issuances of convertible debt, promissory
notes and equity securities. These factors create substantial doubt about the Company's ability to continue as a going concern for
at least one year after the date that these condensed consolidated financial statements are issued.

 The condensed consolidated
financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. Accordingly,
the condensed consolidated financial statements have been prepared on a basis that assumes the Company will continue as a going concern
and which contemplates the realization of assets and satisfaction of liabilities and commitments in the ordinary course of business.

 In making this assessment
management performed a comprehensive analysis of the Company's current circumstances, including its financial position, cash flow
and cash usage forecasts, as well as obligations and debts. Although management has a long history of successful capital raises, the analysis
used to determine the Company's ability as a going concern does not include cash sources beyond the Company's direct control
that management expects to be available within the next 12 months.

 Management expects that the
Company's existing cash and cash equivalents, accounts receivable and marketable securities as of December 31, 2023, will not be
sufficient to enable the Company to fund its anticipated level of operations through one year from the date these financial statements
are issued. Management anticipates raising additional capital through the private and public sales of the Company's equity or debt
securities and selling its marketable securities and digital currencies, or a combination thereof. Although management believes that such
capital sources will be available, there can be no assurances that financing will be available to the Company when needed in order to
allow the Company to continue its operations, or if available, on terms acceptable to the Company. If the Company does not raise sufficient
capital in a timely manner, among other things, the Company may be forced to scale back its operations or cease operations altogether.

 3. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

 Basis of Presentation

 The accompanying consolidated
financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America ("GAAP").

 Principles of Consolidation

 The consolidated financial
statements include the accounts of Ault Alliance and its wholly owned and majority-owned subsidiaries. The consolidated financial statements
also include the accounts of all entities that the Company controls as the primary beneficiary of a variable interest entity ("VIE").
All intercompany accounts and transactions have been eliminated upon consolidation.

 The accounting guidance requires
an enterprise to perform an analysis to determine whether the enterprise's variable interest or interests give it a controlling
financial interest in a variable interest entity; to require ongoing reassessments of whether an enterprise is the primary beneficiary
of a VIE; to eliminate the solely quantitative approach previously required for determining the primary beneficiary of a VIE; to add an
additional reconsideration event for determining whether an entity is a VIE when any changes in facts and circumstances occur such that
holders of the equity investment at risk, as a group, lose the power from voting rights or similar rights of those investments to direct
the activities of the entity that most significantly impact the entity's economic performance; and to require enhanced disclosures
that will provide readers of financial statements with more transparent information about an enterprise's involvement in a VIE.

 Variable Interest Entities

 For VIEs, the Company assesses
whether it is the primary beneficiary as prescribed by the accounting guidance on the consolidation of a VIE.

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

 F- 14

 Revenue Recognition

 The Company recognizes revenue
under ASC 606, Revenue from Contracts with Customers ("ASC 606"). The core principle of ASC 606 is that a company should
recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which
the company expects to be entitled in exchange for those goods or services. The following five steps are applied to achieve that core
principle:

 Step 1: Identify the contract with the customer;

 Step 2: Identify the performance obligations
in the contract;

 Step 3: Determine the transaction price;

 Step 4: Allocate the transaction price to the
performance obligations in the contract; and

 Step 5: Recognize revenue when the company satisfies
a performance obligation.

 Sales of Products

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

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

 Manufacturing Services

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

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

 Lending and Trading Activities

 Lending Activities

 The Fintech segment, through Ault Lending,
LLC ("Ault Lending"), generates revenue from lending activities primarily through interest, origination fees and late/other
fees. Interest income on these products is calculated based on the contractual interest rate and recorded as interest income as earned.
The origination fees or original issue discounts are recognized over the life of the loan using the effective interest method.

 F- 15

 Trading Activities

 The Fintech segment, through Ault Lending,
also generates revenue from trading activities primarily through sales of securities and unrealized gains and losses from held securities.
All investment transactions are recorded on a trade date basis. Financial instruments utilized in trading activities are carried at fair
value. For more information on fair value, see Note 6. Fair Value of Financial Instruments. Trading-related revenue can be volatile and
is largely driven by general market conditions. Also, trading-related revenue is dependent on the volume and type of transactions, the
level of risk assumed, and the volatility of price and rate movements at any given time within the ever-changing market environment. Realized
and unrealized gains and losses are recognized in revenue from trading activities.

 Bitcoin Mining

 The Company has entered into
a digital asset mining pool by executing a contract with a mining pool operator to provide hash calculation services to the mining pool.
The Company's customer, as defined in ASC 606-10-20, is the mining pool operator with which the Company has agreed to the terms
of service and user service agreement. The Company supplies hash calculation services, in exchange for consideration, to the pool operator
who in turn provides transaction verification services to third parties via a mining pool that includes other participants. The Company's
performance obligation is the provision of hash calculation services to the pool operator and this performance obligation is an output
of the Company's ordinary activities for which it decides when to provide services under the contract.

 The Company's enforceable
right to compensation begins only when, and lasts as long as, the Company provides hash calculation services to the mining pool operator
and is created as power is provided over time. The only consideration due to the Company relates to the provision of hash calculation
services. The contract with the pool operator provides both parties the unilateral enforceable right to terminate the contract at any
time without penalty. The customer termination option results in a contract that continuously renews throughout the day and therefore
has a duration of less than 24 hours. The implied renewal option is not a material right because there are no upfront or incremental fees
in the initial contract and the terms, conditions, and compensation amount for the renewal options are at the then market rates. Providing
such hash calculation services is the only performance obligation in the Company's contracts with mining pool operators.

 The transaction consideration
the Company receives, if any, is non-cash consideration in the form of Bitcoin. Changes in the fair value of the non-cash consideration
due to form of the consideration (changes in the market price of Bitcoin) are not included in the transaction price and are therefore
not included in revenue. The mining pool operator charges fees to cover the costs of maintaining the pool and are deducted from amounts
the Company may otherwise earn and are treated as a reduction to the consideration received. Fees fluctuate and historically have been
approximately 0.3% per reward earned, on average.

 The Company participated in
mining pools that used the FPPS payout method for the year ended December 31, 2023. The Company is entitled to compensation once it begins
to perform hash calculations for the pool operator in accordance with the operator's specifications over a 24-hour period beginning
midnight UTC and ending 23:59:59 UTC on a daily basis. The non-cash consideration that the Company is entitled to for providing hash calculations
to the pool operator under the FPPS payout method is made up of block rewards and transaction fees less pool operator fees determined
as follows:

 The non-cash consideration in the form of a block reward is based on the total blocks expected to be generated
on the Bitcoin network for the daily 24-hour period beginning midnight UTC and ending 23:59:59 UTC in accordance with the following formula:
the daily hash calculations that the Company provided to the pool operator as a percent of the Bitcoin network's implied hash calculations
as determined by the network difficulty, multiplied by the total Bitcoin network block rewards expected to be generated for the same daily
period.

 The non-cash consideration in the form of transaction fees paid by transaction requestors is based on
the share of standard transaction fees over the daily 24-hour period beginning midnight UTC and ending 23:59:59 UTC. The pool operator
calculates the standard transaction fee during the 24-hour period using a rolling 144 block moving average of actual transaction fees.

 The block reward and transaction fees earned by the Company are reduced by mining pool fees charged by
the operator for operating the pool based on a rate schedule per the mining pool contract. The mining pool fee is only incurred to the
extent the Company performs hash calculations and generates revenue in accordance with the pool operator's payout formula during
the same 24-hour period beginning midnight UTC daily.

 F- 16

 The contract is in effect
until terminated by either party.

 All consideration pursuant
to this arrangement is variable. It is not probable that a significant reversal of cumulative revenue will occur and the Company is able
to calculate the payout based on the contractual formula, non-cash revenue is estimated and recognized based on the spot price of the
Company's principal market for Bitcoin at the inception of each contract, which is determined to be daily. Non-cash consideration
is measured at fair value at contract inception. Fair value of the crypto asset consideration is determined using the midnight UTC spot
price of the Company's principal market for Bitcoin at the beginning of the contract period. This amount is estimated and recognized
in revenue upon inception, which is when hash rate is provided. The Company recognizes non-cash consideration on the same day that control
of the contracted service is transferred to the pool operator, which is the same day as the contract inception.

 There is no significant financing
component in these transactions.

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

 Crane Operations - Heavy Lifting and Pump
Maintenance Services

 The Company generates revenue
by providing heavy lifting and pump maintenance services to customers under various short-term agreements which may be hourly, daily,
weekly or monthly. Each service agreement generally has one performance obligation and includes a promise to complete the service at a
specified location and time and identifies the billing rate to be charged. Payment terms are identified in the terms of the contract and
agreed to by both parties for each promised service within the contract prior to the commencement or performance of said services. The
collectability of payment is considered probable based on management's history with the certain type and class of customers and
their ability and intention of payment. The customer simultaneously receives and consumes the benefits as the Company provides the hourly,
daily, weekly or monthly service.

 Cash and Cash Equivalents

 The Company considers all
highly liquid investments with a maturity of three months or less at the time of purchase to be cash equivalents. Financial instruments
that potentially subject the Company to a concentration of credit risk consist of cash and cash equivalents. The Company's cash
is maintained in checking accounts, money market funds and certificates of deposits with reputable financial institutions. These balances
exceed the United States ("U.S.") Federal Deposit Insurance Corporation insurance limits. The Company had cash and cash equivalents
of $ 1.5 million at both December 31, 2023 and 2022 in the United Kingdom ("U.K."), and $ 1.7 million and $ 0.6 million, respectively,
in Israel. The Company has not experienced any losses on deposits of cash and cash equivalents.

 Restricted Cash

 As
of December 31, 2023, restricted cash included $4.3 million of cash collateral for notes payable and $0.7 million of cash held in
trust related to environmental contingencies related to the Michigan data center. As of December 31, 2022, restricted cash included $0.7
million of cash held in trust related to environmental contingencies related to the Michigan data center.

 Cash,
cash equivalents and restricted cash consisted of the following:

 Schedule of cash equivalents and restricted cash

 2023

 2022

 $
 8,625,000

 $
 7,942,000

 Restricted cash

 4,966,000

 732,000

 Total cash, cash equivalents and restricted cash

 $
 13,591,000

 $
 8,674,000

 Cash and Marketable Securities Held
in Trust Account

 As
of December 31, 2023 and 2022, the Company held $ 2.2
million and $ 118.2 million, respectively, in cash and marketable securities in a trust account. Cash and marketable securities held
in the trust account represents cash and money market funds that primarily invest in U.S. treasury bills that were purchased with
funds raised through the initial public offering of Ault Disruptive, a consolidated special purpose acquisition company. The funds
raised are held in a trust account that is restricted for use and may only be used for purposes of completing an initial business
combination or redemption of the common stock of Ault Disruptive, as set forth in the trust agreement. The funds held in trust are
included within Level 1 of the fair value hierarchy.

 F- 17

 Bitcoin

 Bitcoin
awarded to the Company through its mining activities are accounted for in connection with the Company's revenue recognition policy.

 Bitcoin
held are accounted for as intangible assets with indefinite useful lives. Bitcoin is sold on a first-in first-out basis and measured for
impairment whenever indicators of impairment are identified based on the intraday low quoted price of Bitcoin. To the extent an impairment
loss is recognized, the loss establishes the new cost basis of the Bitcoin. Subsequent reversal of impairment losses is not permitted.
Bitcoin is classified on our balance sheet as a current asset due to the Company's ability to sell it in a highly liquid marketplace
and its intent to liquidate most, but not all, of its Bitcoin to support operations.

 Sales
of Bitcoin by the Company and Bitcoin awarded to the Company are included within cash flows from operating activities on the consolidated
statements of cash flows. Realized gains or losses from sales of Bitcoin are included in loss from operations on the consolidated statements
of operations.

 Fair Value of Financial Instruments

 In accordance with ASC 820,
 Fair Value Measurements and Disclosures, fair value is defined as the exit price, or the amount that would be received for the
sale of an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date.

 The guidance also establishes
a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable
inputs by requiring that the most observable inputs be used when available. Observable inputs include those that market participants would
use in valuing the asset or liability and are developed based on market data obtained from sources independent of the Company. Unobservable
inputs are inputs that reflect the Company's assumptions about the factors that market participants would use in valuing the asset
or liability. The guidance establishes three levels of inputs that may be used to measure fair value:

 Level 1: Quoted market prices in active markets
for identical assets or liabilities.

 Level 2: Inputs other than Level 1 that are
observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are
not active; or model-derived valuations. All significant inputs used in the Company's valuations are observable or can be derived
principally from or corroborated with observable market data for substantially the full term of the assets or liabilities. Level 2 inputs
also include quoted prices that were adjusted for security-specific restrictions which are compared to output from internally developed
models such as a discounted cash flow model.

 Level 3: Unobservable inputs that are supported
by little or no market activity and that are significant to the fair value of the assets or liabilities.

 The carrying amounts of financial
instruments carried at cost, including cash and cash equivalents, accounts receivables and accounts and other receivable – related
party, investments, notes receivable, trade payables and trade payables – related party approximate their fair value due to the
short-term maturities of such instruments.

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

 Equity Investments

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

 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.

 F- 18

 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.

 Accounts Receivable and Allowance for Credit Losses

 The Company's receivables
are recorded when invoiced and represent claims against third parties that will be settled in cash. The Company records accounts receivable
at the invoiced amount less an allowance for any potentially uncollectible accounts under the current expected credit loss impairment
model and discloses the net amount of the financial instrument expected to be collected. The Company estimates the allowance for credit
losses based on an ongoing review of existing economic conditions, the financial conditions of the customers, historical trends in credit
losses, and the amount and age of past due accounts. Past-due receivable balances are written off when the Company's internal collection
efforts have been unsuccessful in collecting the amount due.

 Concentration of Credit Risk

 Financial instruments that
potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents and trade receivables.

are invested in banks in the U.S., U.K. and Israel. Such deposits in the U.S. may be in excess of insured limits and are not insured in
other jurisdictions.

 Trade receivables of the Company
and its subsidiaries are mainly derived from sales to customers located primarily in the U.S., Europe and Israel. The Company performs
ongoing credit evaluations of its customers and to date has not experienced any material losses. An allowance for doubtful accounts is
determined with respect to those amounts that the Company and its subsidiaries have determined to be doubtful of collection.

 Inventories are stated at
the lower of cost or net realizable value. Inventory write-offs are provided to cover risks arising from slow-moving items or technological
obsolescence.

 Cost of inventories is determined as
follows:

 Raw materials, parts
and supplies - using the "first-in, first-out" method; and

 Work-in-progress and finished products
- on the basis of direct manufacturing costs with the addition of indirect manufacturing costs.

 Inventories are stated at
the lower of cost (first-in, first-out method) or net realizable value. Inbound shipping and handling costs are classified as a component
of cost of revenues in the consolidated statements of operations. The Company reviews the components of its inventory and its inventory
purchase commitments on a regular basis for excess and obsolete inventory based on estimated future usage and sales. Write-downs in inventory
value or losses on inventory purchase commitments depend on various items, including factors related to customer demand, economic and
competitive conditions, technological advances or new product introductions by the Company or its customers that vary from its current
expectations. Whenever inventory is written down, a new cost basis is established and the inventory is not subsequently written up if
market conditions improve.

 During the years ended December
31, 2023 and 2022, the Company did not record inventory write-offs within the cost of revenue.

 F- 19

 Property and Equipment, Net

 Property and equipment are stated at cost, net of accumulated depreciation.
Gains or losses on disposals of property and equipment are recorded within income from operations. Repairs and maintenance costs are expensed
as incurred. Significant improvements or betterments are capitalized and depreciated over the estimated life of the asset. Depreciation
is calculated using the straight-line method over the estimated useful lives of the assets, at the following annual rates:

 Schedule of estimated useful life of property, plant and equipment

 Useful lives (in years)

 Bitcoin mining equipment

 Computer, software and related equipment

 3 – 5

 Office furniture and equipment

 5 – 10

 Crane rental equipment

 7 – 10

 Aircraft

 Vehicles

 5 – 7

 Building and building improvements

 29 – 39

 Leasehold improvements

 Over the term of the lease or the life of the asset, whichever is shorter.

 Leases

 The Company accounts for its
leases under ASC 842, Leases. Under this guidance, arrangements meeting the definition of a lease are classified as operating or
financing leases. The Company only has operating leases. Operating leases are recognized as right-of-use assets, operating lease liability,
current, and operating lease liability, non-current on the Company's consolidated balance sheets. Lease assets and liabilities are
recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As most of the Company's
leases do not provide an implicit rate, the Company uses the Company's incremental borrowing rate based on the information available
at commencement date in determining the present value of future payments. In certain of the Company's lease agreements, the Company
receives periods of reduced rent or free rent and other incentives. The Company recognizes lease costs on a straight-line basis over the
lease term without regard to deferred payment terms, such as rent holidays, that defer the commencement date of required payments. The
Company's lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise
that option. Leasehold improvements are capitalized at cost and amortized over the lesser of their expected useful life or the life of
the lease, without assuming renewal features, if any, are exercised. The Company does not separate lease and non-lease components for
the Company's leases.

 Impairment of Long-Lived Assets

 Management reviews long-lived
assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.
Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to undiscounted expected future
cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured
by comparing the carrying amount of the assets to their fair value.

 Impairment of Debt Securities

 Debt securities are evaluated
periodically to determine whether a decline in their value is other than temporary. The Company utilizes criteria such as the magnitude
and duration of the decline, in addition to the reason underlying the decline, to determine whether the loss in value is other than temporary.
The term "other than temporary" is not intended to indicate that the decline is permanent. It indicates that the prospects
for a near term recovery of value are not necessarily favorable, or that there is a lack of evidence to support fair values equal to,
or greater than, the carrying value of the investment. Once a decline in value is determined to be other than temporary, the value of
the security is reduced and a corresponding charge to earnings is recognized.

 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.

 F- 20

 The Company evaluates its
goodwill for impairment in accordance with ASC 350, Intangibles – Goodwill and Other. Goodwill is recorded when the
purchase price paid for an acquisition exceeds the estimated fair value of the net identified tangible and intangible assets acquired.

 The Company tests the recorded
amount of goodwill for impairment on an annual basis on December 31 or more frequently if there are indicators that the carrying amount
of the goodwill exceeds its carried value.

 Intangible Assets

 The Company acquired amortizable
intangibles assets as part of asset purchase agreements consisting of customer relationships, trade names and proprietary technology.
The Company also has the trade names and trademarks associated with the acquisitions of Microphase Corporation ("Microphase")
and Relec Electronics Ltd. ("Relec"), which were determined to have an indefinite life.

 The Company reviews intangible
assets for impairment whenever events or changes in business circumstances indicate that the carrying amount of the assets might not be
recoverable. Factors that the Company considers in deciding when to perform an impairment review include significant underperformance
of the business in relation to expectations, significant negative industry or economic trends, and significant changes or planned changes
in the use of the assets. If an impairment review is performed to evaluate a long-lived asset for recoverability, the Company compares
forecasts of undiscounted cash flows expected to result from the use and eventual disposition of the long-lived asset to its carrying
value. An impairment loss would be recognized when estimated undiscounted future cash flows expected to result from the use of an asset
are less than its carrying amount. The impairment loss would be based on the excess of the carrying value of the impaired asset over its
fair value, determined based on discounted cash flows.

 Common Stock Purchase Warrants and Other
Derivative Financial Instruments

 The Company classifies common
stock purchase warrants and other free standing derivative financial instruments as equity if the contracts (i) require physical
settlement or net-share settlement or (ii) give the Company a choice of net-cash settlement or settlement in its own shares (physical
settlement or net-share settlement). The Company classifies any contracts that (i) require net-cash settlement (including a requirement
to net cash settle the contract if an event occurs and if that event is outside the control of the Company), (ii) give the counterparty
a choice of net-cash settlement or settlement in shares (physical settlement or net-share settlement), or (iii) contain reset provisions,
as either an asset or a liability. The Company assesses classification of its freestanding derivatives at each reporting date to determine
whether a change in classification between assets and liabilities is required. The Company determined that certain freestanding derivatives,
which principally consist of issuance of warrants to purchase shares of common stock in connection with convertible notes and to employees
of the Company, satisfy the criteria for classification as equity instruments as these warrants do not contain cash settlement features
or variable settlement provisions that cause them to not be indexed to the Company's own stock.

 Fair value option

 The Company has elected to record the senior secured
convertible promissory note, related party ("Convertible Notes") at fair value on the date of issuance, with gains and losses
arising from changes in fair value recognized in the consolidated statements of operations at each period end while those are outstanding.
Issuance costs are recognized in the consolidated statement of operations in the period in which they are incurred. The Company utilized
a Monte-Carlo simulation at inception to value the Note. The Monte-Carlo simulation is calculated as the average present value over all
simulated paths. The key inputs and assumptions used in the Monte-Carlo Simulation, including volatility, estimated market yield, risk-free
rate, the probability of various scenarios, including held to maturity and subsequent preferred stock offering and various simulated paths.

 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 instruments 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.

 Convertible Instruments

 The Company accounts for hybrid
contracts that feature conversion options in accordance with ASC 815, Derivatives and Hedging Activities ("ASC 815").
ASC 815 requires companies to bifurcate conversion options from their host instruments and account for them as freestanding derivative
financial instruments according to certain criteria. The criteria include circumstances in which (a) the economic characteristics
and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host
contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured
at fair value under otherwise applicable GAAP with changes in fair value reported in earnings as they occur and (c) a separate instrument
with the same terms as the embedded derivative instrument would be considered a derivative instrument.

 Conversion options that contain
variable settlement features such as provisions to adjust the conversion price upon subsequent issuances of equity or equity linked securities
at exercise prices more favorable than that featured in the hybrid contract generally result in their bifurcation from the host instrument.

 The Company accounts for convertible
instruments, when the Company has determined that the embedded conversion options should not be bifurcated from their host instruments,
in accordance with ASC 470-20, Debt with Conversion and Other Options ("ASC 470-20"). Under ASC 470-20, the Company
records, when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based
upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective
conversion price embedded in the note. The Company accounts for convertible instruments (when the Company has determined that the embedded
conversion options should be bifurcated from their host instruments) in accordance with ASC 815.

 F- 21

 Debt Discounts

 The Company accounts for debt
discount according to ASC 470-20, Debt with Conversion and Other Options. Debt discounts are amortized through periodic charges
to interest expense over the term of the related financial instrument using the effective interest method.

 Guarantee Liability

 The Company maintains a guarantee liability that represents its exposure
related to guarantees associated with related party debt. The guarantee liability is reported in current liabilities as a separate line
item on the consolidated balance sheets, and the provision for guarantee liability is reported in other income (expense) as a separate
line item on the consolidated statement of operations. The guarantee liability represents management's estimate of the Company's
exposure to losses pursuant to the Company's related party guarantee obligations.

 Redeemable
Non-Controlling Interests in Equity of Subsidiary

 The
Company records redeemable non-controlling interests in equity of subsidiaries to reflect the economic interests of the common
stockholders in Ault Disruptive. These interests are presented as redeemable non-controlling interests in equity of subsidiaries
within the consolidated balance sheets, outside of the permanent equity section. The common stockholders in Ault Disruptive have
redemption rights that are considered to be outside of the Company's control. As of December 31, 2023 and 2022, the carrying amount of
the redeemable non-controlling interest in equity of subsidiaries was recorded at its redemption value of $ 2.2 million and $ 117.9 million, respectively. Remeasurements
to the redemption value of the redeemable non-controlling interest in equity of subsidiaries are recorded within additional paid-in capital.

 Activity
for the years ended December 31, 2023 and 2022 reconciled in the following table:

 Schedule of redeemable non-controlling interest

 Gross proceeds

 $
 115,000,000

 Less:

 Proceeds allocated to Ault Disruptive public warrants

 ( 4,313,000
)

 Issuance costs allocated to Ault Disruptive common stock

 ( 6,867,000
)

 Plus:

 Remeasurement of carrying value to redemption value

 14,173,000

 Redeemable non-controlling interests in equity of subsidiaries as of December 31, 2022

 117,993,000

 Less:

 Redemptions of Ault Disruptive common stock

 ( 120,064,000
)

 Plus:

 Remeasurement of carrying value to redemption value

 1,963,000

 Extension proceeds paid by the Ault Disruptive sponsor

 2,332,000

 Redeemable non-controlling interests in equity of subsidiaries as of December 31, 2023

 $
 2,224,000

 Treasury Stock

 The Company records the aggregate
purchase price of treasury stock at cost and includes treasury stock as a reduction to stockholders' equity.

 Stock-Based Compensation

 The Company accounts for stock-based
compensation in accordance with ASC 718, Compensation – Stock Compensation ("ASC 718").

 The Company uses the Black-Scholes
option pricing model for determining the estimated fair value for stock-based awards. The Black-Scholes model requires the use of assumptions
which determine the fair value of stock-based awards, including the option's expected term and the price volatility of the underlying
stock.

 Under ASC 718:

 the Company recognizes stock-based expenses related to stock option awards on a straight-line basis over
the requisite service period of the awards, which is generally the vesting term of two to four years;

 stock-based expenses are recognized net of forfeitures as they occur;

 the expected term assumption, using the simplified method, reflects the period for which the Company believes
the option will remain outstanding;

 the Company determined the volatility of its stock by looking at the historic volatility of its stock
over the expected term of the grant; and

 the risk-free rate reflects the U.S. Treasury yield for a similar expected term in effect at the time
of the grant.

 Income Taxes

 The Company determines its
income taxes under the asset and liability method in accordance with ASC 740, Income Taxes, which requires recognition of
deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements
or tax returns. Under this method, deferred tax assets and liabilities are based on the differences between the financial statement and
tax bases of assets and liabilities using enacted tax rates in effect for the fiscal year in which the differences are expected to reverse.
Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets
will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in
the fiscal years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities
of a change in tax rates is recognized in the Statements of Operations and Comprehensive Loss in the period that includes the enactment
date.

 F- 22

 The Company accounts for uncertain
tax positions in accordance with ASC 740-10-25, which addresses the determination of whether tax benefits claimed or expected to be claimed
on a tax return should be recorded in the financial statements. Under ASC 740-10-25, the Company may recognize the tax benefit from an
uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities,
based on the technical merits of the position. The tax benefit to be recognized is measured as the largest amount of benefit that
has a greater than fifty percent likelihood of being realized upon ultimate settlement. To the extent that the final tax outcome of these
matters is different than the amount recorded, such differences impact income tax expense in the period in which such determination is
made. Interest and penalties, if any, related to accrued liabilities for potential tax assessments are included in income tax expense.
ASC 740-10-25 also requires management to evaluate tax positions taken by the Company and recognize a liability if the Company has
taken uncertain tax positions that more likely than not would not be sustained upon examination by applicable taxing authorities. Management
of the Company has evaluated tax positions taken by the Company and has concluded that as of December 31, 2023 and 2022, there were no
uncertain tax positions taken, or expected to be taken, that would require recognition of a liability that would require disclosure in
the financial statements.

 Foreign Currency Translation

 A substantial portion of the
Company's revenues are generated in U.S. dollars. In addition, a substantial portion of the Company's costs are incurred in
U.S. dollars. Company management has determined that the U.S. dollar is the functional currency of the primary economic environment in
which it operates.

 Accordingly, monetary accounts
maintained in currencies other than the U.S. dollar are re-measured into U.S. dollars in accordance with FASB issued ASC 830, Foreign
Currency Matters ("ASC 830"). All transaction gains and losses from the re-measurement of monetary balance sheet
items are reflected in the statements of operations as financial income or expenses as appropriate.

 The financial statements of
Gresham Power, Relec, and Enertec, whose functional currencies have been determined to be their local currencies, the British Pound ("GBP"),
GBP, and the Israeli Shekel, respectively, have been translated into U.S. dollars in accordance with ASC 830. All balance sheet accounts
have been translated using the exchange rates in effect at the balance sheet date. Statement of operations amounts have been translated
using the average exchange rate in effect for the reporting period. The resulting translation adjustments are reported as other comprehensive
loss in the consolidated statement of comprehensive loss and accumulated comprehensive loss in statement of changes in stockholders'
equity.

 Comprehensive Loss

 The Company reports comprehensive
loss in accordance with ASC 220, Comprehensive Income. This statement establishes standards for the reporting and presentation
of comprehensive loss and its components in a full set of general purpose financial statements. Comprehensive loss generally represents
all changes in equity during the period except those resulting from investments by, or distributions to, stockholders. The Company determined
that its items of other comprehensive loss relate to changes in foreign currency translation adjustments and impairment of debt securities.

 Accounting Estimates

 The preparation of the consolidated
financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of
assets and liabilities at the date of the consolidated financial statements and reported amounts of revenue and expense during the reporting
period. Estimates are used when accounting for certain items such as valuation of securities, reserves for trade receivables and inventories,
the fair value of loans receivables, intangible assets and goodwill, useful lives and the recoverability of long-lived assets, stock-based
arrangements, contingent consideration, and deferred income taxes and related valuation allowance. Estimates are based on historical experience,
where applicable, and assumptions that management believes are reasonable under the circumstances. Due to the inherent uncertainty involved
with estimates, actual results may differ.

 Preferred Stock Liabilities

 The Company follows ASC 480-10,
 Distinguishing Liabilities from Equity, in its evaluation of the accounting for preferred stock liabilities. ASC 480-10-25-14 requires
liability accounting for certain financial instruments, including shares that embody an unconditional obligation to transfer a variable
number of shares, provided that the monetary value of the obligation is based solely or predominantly on one of the following three characteristics:

 A fixed monetary amount known at inception;

 Variations in something other than the fair value of the issuer's shares; or

 Variations in the fair value of the issuer's equity shares, but the monetary value to the counterparty
moves in the opposite direction as the value of the issuer's shares.

 The number of shares delivered
is determined on the basis of (1) the fixed monetary amount determined as the stated value and (2) the current stock price at settlement,
so that the aggregate fair value of the shares delivered equals the monetary value of the obligation, which is fixed or predominantly
fixed. Accordingly, the holder is not significantly exposed to gains and losses attributable to changes in the fair value of the Company's
equity shares. Instead, the Company is using its own equity shares as currency to settle a monetary obligation.

 F- 23

 Discontinued Operations

 The Company records discontinued
operations when the disposal of a separately identified business unit constitutes a strategic shift in the Company's operations,
as defined in ASC Topic 205-20, Discontinued Operations ("ASC Topic 205-20").

 Reclassifications

 Certain prior year amounts
have been reclassified for comparative purposes to conform to the current-year financial statement presentation. These reclassifications
had no effect on previously reported results of operations. The impact on any prior period disclosures was immaterial.

 Recently Adopted Accounting Pronouncements

 In June 2016, the FASB issued
Accounting Standards Update ("ASU") 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses
on Financial Instruments. The amendments included in ASU 2016-13 require the measurement of all expected credit losses for financial
assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Although
the new standard, known as the current expected credit loss ("CECL") model, has a greater impact on financial institutions,
most other organizations with financial instruments or other assets (trade receivables, contract assets, lease receivables, financial
guarantees, loans and loan commitments, and held-to-maturity debt securities) are subject to the CECL model and will need to use forward-looking
information to better evaluate their credit loss estimates. Many of the loss estimation techniques applied today will still be permitted,
although the inputs to those techniques will change to reflect the full amount of expected credit losses. The Company adopted this standard
as of January 1, 2023. The adoption of this guidance did not have a material impact on the Company's 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 an acquirer in a business combination to recognize and measure contract assets and contract liabilities
in accordance with ASC Topic 606. The Company adopted this standard as of January 1, 2023. The adoption of this guidance did not have
a material impact on the Company's consolidated financial statements.

 Recently
Issued Accounting Pronouncements

 The Company continually assesses
any new accounting pronouncements to determine their applicability. When it is determined that a new accounting pronouncement may affect
the Company's financial reporting, the Company undertakes an analysis to determine any required changes to its consolidated financial
statements.

 On December 14, 2023, the
FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. ASU 2023-09 requires entities to
disclose specific rate reconciliations, amount of income taxes separated by federal and individual jurisdiction, and the amount of income
(loss) from continuing operations before income tax expense (benefit) disaggregated between federal, state, and foreign. The new standard
is effective for the Company for its fiscal year beginning January 1, 2025, with early adoption permitted. The Company is currently evaluating
the impact of adopting the standard.

 On December 13, 2023, the
FASB issued ASU No. 2023-08, Intangibles - Goodwill and Other - Crypto Assets (Topic 350-60): Accounting for and Disclosure of Crypto
Assets ("ASU 2023-08"). ASU 2023-08 requires entities to measure crypto assets that meet specific criteria at fair value
with changes recognized in net income each reporting period. Additionally, ASU 2023-08 requires an entity to present crypto assets measured
at fair value separately from other intangible assets in the balance sheets and record changes from remeasurement of crypto assets separately
from changes in the carrying amounts of other intangible assets in the income statement. The new standard is effective for the Company
for its fiscal year beginning January 1, 2025, with early adoption permitted. The Company early adopted ASU 2023-08 effective as of January
1, 2024, which, at the time of adoption, did not have a material impact on its consolidated financial statements.

 On November 27, 2023, the
FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures ("ASU 2023-07").
ASU 2023-07 is designed to improve the reportable segment disclosure requirements, primarily through enhanced disclosures about significant
segment expenses that are regularly provided to the chief operating decision maker. The new standard is effective for the Company for
its fiscal year beginning January 1, 2025, with early adoption permitted. The Company is currently evaluating the impact of adopting the
standard.

 F- 24

 4. ASSETS HELD FOR SALE AND DISCONTINUED OPERATIONS

 Presentation of AGREE Operations

 In September 2023, the Company
committed to a plan for its wholly owned subsidiary AGREE to list for sale its four recently renovated Midwest hotels, the Hilton Garden
Inn in Madison West, the Residence Inn in Madison West, the Courtyard in Madison West, and the Hilton Garden Inn in Rockford. The decision
to sell the hotels follows the decision to also list the multifamily development site in St. Petersburg, Florida and is driven by the
Company's desire to focus on its core businesses, Energy, Fintech and Sentinum. The Company's real estate properties, which
include both hotels and land, are currently listed for sale.

 In connection with the planned
sale of AGREE assets, the Company concluded that the net assets of AGREE met the criteria for classification as held for sale. In addition,
the proposed sale represents a strategic shift that will have a significant effect on the Company's operations and financial results.
As a result, the Company has presented the results of operations, cash flows and financial position of AGREE as discontinued operations
in the accompanying consolidated financial statements and notes for all periods presented. The assets held for sale were measured at the
lower of their carrying amount or fair value less cost to sell. The Company performed a fair value analysis for the disposal group utilizing
an income approach for the hotels and a market approach for the land, resulting in an $8.3 million impairment of property and equipment.

 As of December 31, 2023, the
Company expected the planned sale of AGREE assets to close within one year and, as a result, the Company has classified the total assets
and total liabilities associated with AGREE as current in the consolidated balance sheets as of December 31, 2023.

the assets and liabilities of AGREE operations:

 Schedule of assets and liabilities of agree operations

 2023

 2022

 $
 1,080,000

 $
 2,550,000

 Restricted cash

 697,000

 2,831,000

 247,000

 264,000

 50,000

 44,000

 Property and equipment, net - current

 88,525,000

 -

 392,000

 270,000

 Total current assets

 90,991,000

 5,959,000

 -

 92,535,000

 Total assets

 90,991,000

 98,494,000

 2,631,000

 Notes payable, current

 67,262,000

 -

 Total current liabilities

 70,361,000

 2,631,000

 Notes payable

 -

 61,633,000

 Total liabilities

 70,361,000

 64,264,000

 Net assets of discontinued operations

 $
 20,630,000

 $
 34,230,000

 A disposal group classified
as held for sale shall be measured at the lower of its carrying amount or fair value less costs to sell. No impairment was recognized
upon reclassification of the disposal group as held for sale.

the results of AGREE operations:

 Schedule of estimated costs to sell and expected

 2023

 2022

 Revenue, hotel and real estate operations

 $
 16,161,000

 $
 16,697,000

 Cost of revenue, hotel operations

 12,300,000

 11,406,000

 Gross profit

 3,861,000

 5,291,000

 General and administrative

 3,383,000

 5,982,000

 8,284,000

 -

 Total operating expenses

 11,667,000

 5,982,000

 Loss from operations

 ( 7,806,000
)

 ( 691,000
)

 ( 7,898,000
)

 ( 5,204,000
)

 Net loss from discontinued operations

 $
 ( 15,704,000
)

 $
 ( 5,895,000
)

 F- 25

 The cash flow activity related
to discontinued operations is presented separately on the statement of cash flows as summarized below:

 Schedule of cash flow activity related
to discontinued operations

 For the Year Ended December 31,

 2023

 2022

 Cash flows from operating activities:

 $
 ( 15,704,000
)

 $
 ( 5,895,000
)

 Adjustments to reconcile net loss to net cash provided by operating activities:

 Depreciation and amortization

 2,074,000

 3,322,000

 Amortization of debt discount

 392,000

 391,000

 8,284,000

 -

 Changes in operating assets and liabilities:

 17,000

 ( 213,000
)

 ( 6,000
)

 ( 13,000
)

 ( 122,000
)

 349,000

 467,000

 2,026,000

 Net cash used in operating activities

 ( 4,598,000
)

 ( 33,000
)

 Cash flows from investing activities:

 Purchase of property and equipment

 ( 6,347,000
)

 ( 9,111,000
)

 Net cash used in investing activities

 ( 6,347,000
)

 ( 9,111,000
)

 Cash flows from financing activities:

 Proceeds from notes payable

 5,237,000

 7,340,000

 Cash contributions from parent

 2,104,000

 794,000

 Net cash provided by financing activities

 7,341,000

 8,134,000

 Net decrease in cash and cash equivalents and restricted cash

 ( 3,604,000
)

 ( 1,010,000
)

 Cash and cash equivalents and restricted cash at beginning of period

 5,381,000

 6,391,000

 Cash and cash equivalents and restricted cash at end of period

 $
 1,777,000

 $
 5,381,000

 Supplemental disclosures of cash flow information:

 Cash paid during the period for interest

 $
 7,506,000

 $
 4,813,000

 5. REVENUE DISAGGREGATION

 The following tables summarize
disaggregated customer contract revenues and the source of the revenue for the years ended December 31, 2023 and 2022. 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 year ended December 31, 2023:

 Schedule of disaggregated revenues

 Year
 ended December 31, 2023

 GIGA

 TurnOnGreen

 Fintech

 Sentinum

 SMC

 Energy

 ROI

 Total

 Primary Geographical Markets

 North America

 $
 13,161,000

 $
 3,879,000

 $
 -

 $

 $
 31,099,000

 $
 49,431,000

 $

 $
 132,398,000

 Europe

 8,351,000

 29,000

 -

 -

 238,000

 666,000

 -

 9,394,000

 Middle East and other

 16,247,000

 293,000

 -

 -

 220,000

 -

 -

 16,760,000

 -

 50,097,000

 158,442,000

 Revenue, lending and trading activities (North
 America)

 -

 -

)

 -

 -

 -

 -

)

 $

 $

 $
)

 $

 $

 $
 50,097,000

 $

 $
 156,444,000

 Major Goods or Services

 Radio frequency/microwave filters

 $
 8,196,000

 $
 -

 $
 -

 $
 -

 $
 -

 $
 -

 $
 -

 $
 8,196,000

 Power supply units and systems

 8,973,000

 -

 -

 -

 -

 -

 13,174,000

 Healthcare diagnostic systems

 4,095,000

 -

 -

 -

 -

 -

 -

 4,095,000

 Defense systems

 16,495,000

 -

 -

 -

 -

 -

 -

 16,495,000

 Digital currencies mining

 -

 -

 -

 -

 -

 -

 Karaoke machines and related consumer goods

 -

 -

 -

 -

 -

 -

 Crane rental

 -

 -

 -

 -

 -

 -

 Other

 -

 -

 -

 1,416,000

 -

 899,000

 2,620,000

 -

 50,097,000

 158,442,000

 -

 -

)

 -

 -

 -

 -

)

 $

 $

 $
)

 $

 $

 $
 50,097,000

 $

 $
 156,444,000

 Timing of Revenue Recognition

 Goods transferred at a point in time

 $
 20,647,000

 $
 348,000

 $
 -

 $

 $

 $
 999,000

 $

 $
 88,279,000

 Services transferred over time

 17,112,000

 3,853,000

 -

 -

 -

 -

 70,163,000

 $

 $

 $
 -

 $

 $

 $
 50,207,000

 $

 $
 158,442,000

 F- 26

 The Company's disaggregated
revenues consisted of the following for the year ended December 31, 2022:

 Year
 ended December 31, 2022

 GIGA

 TurnOnGreen

 Fintech

 Sentinum

 SMC

 Energy

 Total

 Primary Geographical Markets

 North America

 $
 7,317,000

 $
 4,514,000

 $

 $

 $
 23,217,000

 $

 $
 55,824,000

 Europe

 9,907,000

 115,000

 -

 -

 337,000

 216,000

 10,575,000

 Middle East and other

 13,031,000

 893,000

 -

 -

 670,000

 -

 14,594,000

 80,993,000

 Revenue, lending and trading
 activities (North America)

 -

 -

 -

 -

 -

 $

 $

 $
 36,883,000

 $

 $

 $

 $
 117,637,000

 Major Goods or Services

 Radio frequency/microwave filters

 $
 6,130,000

 $
 -

 $
 -

 $
 -

 $
 -

 $
 -

 $
 6,130,000

 Power supply units and systems

 11,605,000

 -

 -

 -

 -

 17,127,000

 Healthcare diagnostic systems

 4,073,000

 -

 -

 -

 -

 -

 4,073,000

 Defense systems

 8,447,000

 -

 -

 -

 -

 -

 8,447,000

 Digital currencies mining

 -

 -

 -

 -

 -

 Karaoke machines and related consumer goods

 -

 -

 -

 -

 -

 Crane rental

 -

 -

 -

 -

 -

 Other

 -

 -

 1,105,000

 -

 216,000

 1,560,000

 80,993,000

 -

 -

 -

 -

 -

 $

 $

 $
 36,883,000

 $

 $

 $

 $
 117,637,000

 Timing of Revenue Recognition

 Goods transferred at a point in time

 $
 18,430,000

 $
 5,519,000

 $

 $

 $

 $
 216,000

 $
 66,426,000

 Services transferred over time

 11,825,000

 3,000

 -

 -

 -

 14,567,000

 $

 $

 $

 $

 $

 $

 $
 80,993,000

 6.
 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, assets measured on recurring basis

 Fair Value Measurement at December 31, 2023

 Total

 Level 1

 Level 2

 Level 3

 Assets:

 Investment in common stock of Alzamend Neuro, Inc. ("Alzamend") – a related party

 $

 $

 $
 -

 $
 -

 Investments in marketable equity securities

 -

 -

 Cash and marketable securities held in trust account

 -

 -

 Total assets measured at fair value

 $
 2,906,000

 $
 2,906,000

 $
 -

 $
 -

 Liabilities:

 Warrant and embedded conversion feature liabilities

 $
 1,742,000

 $
 -

 $
 -

 $
 1,742,000

 Convertible promissory notes

 22,485,000

 -

 -

 22,485,000

 Total liabilities measured at fair value

 $
 24,227,000

 $
 -

 $
 -

 $
 24,227,000

 Fair Value Measurement at December 31, 2022

 Total

 Level 1

 Level 2

 Level 3

 Assets:

 Investment in common stock of Alzamend – a related party

 $

 $

 $
 -

 $
 -

 Investments in marketable equity securities

 6,590,000

 6,590,000

 -

 -

 Cash and marketable securities held in trust account

 118,193,000

 118,193,000

 -

 -

 Investments in other equity securities

 13,340,000

 -

 -

 13,340,000

 Total assets measured at fair value

 $
 144,572,000

 $
 131,232,000

 $
 -

 $
 13,340,000

 Liabilities:

 Warrant and embedded conversion feature liabilities

 $
 2,967,000

 $
 -

 $
 -

 $
 2,967,000

 Convertible promissory notes

 12,776,000

 -

 -

 12,776,000

 Total liabilities measured at fair value

 $
 15,743,000

 $
 -

 $
 -

 $
 15,743,000

 F- 27

 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 year ended December 31, 2023:

 Schedule of investments in
 other equity securities

 Investments in
other equity
securities

 Balance at January 1, 2023

 $
 13,340,000

 Conversion to Level 1 marketable securities

 ( 13,340,000
)

 Balance at December 31, 2023

 $
 -

 Equity Investments
for Which Measurement Alternative Has Been Selected

 As
of December 31, 2023 and 2022, the Company held equity investments in other securities valued at $ 21.8 million and $ 29.2 million,
respectively, that were valued using a measurement alternative. These investments are included in other equity securities in the accompanying
consolidated balance sheets.

 The
Company has made cumulative downward adjustments for impairments for equity securities that do not have readily determinable fair values
as of December 31, 2023 and 2022, totaling $ 15.8
 million and $ 11.5
 million, respectively. For the year ended December 31, 2023, $ 6.2
 million of the impairment charge was recorded as an offset to revenue from lending and trading activities at Ault Lending. The
remaining amount of these adjustments have been reflected in impairment of equity securities within other income (expense) on the consolidated
statement of operations and comprehensive loss.

 7. Marketable Securities

 Marketable securities in
equity securities with readily determinable market prices consisted of the following as of December 31, 2023 and 2022:

 Schedule of marketable securities

 Marketable equity securities at December 31, 2023

 Gross unrealized

 Gross unrealized

 Cost

 gains

 losses

 Fair value

 Common shares

 $
 5,119,000

 $
 12,000

 $
 ( 5,104,000
)

 $

 Marketable equity securities at December 31, 2022

 Gross unrealized

 Gross unrealized

 Cost

 gains

 losses

 Fair value

 Common shares

 $
 10,271,000

 $
 383,000

 $
 ( 4,064,000
)

 $
 6,590,000

 The Company's investment in marketable equity
securities is revalued on each balance sheet date.

 F- 28

 8. DIGITAL CURRENCIES

the activities of the digital currencies for the years ended December 31, 2023 and 2022:

 Schedule of activities of the digital currencies

 Digital

 Currencies

 Balance at January 1, 2022

 $
 2,165,000

 Additions of mined digital currencies

 Payments to vendors

 ( 418,000
)

 ( 3,099,000
)

 Sales of digital currencies

 ( 15,832,000
)

 Realized gain on sales of digital currencies

 1,045,000

 Balance at December 31, 2022

 554,000

 Additions of mined digital currencies

 29,100,000

 Payments to vendors

 ( 28,000
)

 ( 489,000
)

 Sales of digital currencies

 ( 29,111,000
)

 Realized gain on sales of digital currencies

 520,000

 Balance at December 31, 2023

 $
 546,000

 9. INVENTORIES

 At December 31, 2023 and 2022, inventories
consisted of:

 Schedule of inventories

 2023

 2022

 Raw materials, parts and supplies

 $
 5,247,000

 $
 3,653,000

 Work-in-progress

 1,578,000

 3,836,000

 Finished products

 1,559,000

 14,547,000

 Total inventories

 $
 8,384,000

 $
 22,036,000

 10. PROPERTY AND EQUIPMENT, NET

 At December 31, 2023 and
2022, property and equipment consisted of:

 Schedule of property and equipment

 December 31, 2023

 December 31, 2022

 Building, land and improvements

 $
 15,752,000

 $
 12,995,000

 Bitcoin mining equipment

 50,640,000

 42,438,000

 Crane rental equipment

 34,469,000

 32,453,000

 Computer, software and related equipment

 14,335,000

 23,168,000

 Aircraft

 15,983,000

 15,983,000

 Other property and equipment

 8,603,000

 4,896,000

 139,782,000

 131,933,000

 Accumulated depreciation and amortization

 ( 30,953,000
)

 ( 5,882,000
)

 Property and equipment placed in service, net

 108,829,000

 126,051,000

 Construction in progress AVLP equipment

 -

 9,400,000

 Deposits on Bitcoin mining equipment

 -

 11,328,000

 $
 108,829,000

 $
 146,779,000

 Summary of depreciation expense:

 Schedule of depreciation

 For the Year Ended December 31,

 2023

 2022

 Depreciation expense

 $
 25,660,000

 $
 13,939,000

 Impairment of Property and Equipment

31, 2023, certain unforeseen business developments and changes in financial projections at AVLP indicated that an impairment triggering
event had occurred. Testing performed indicated the estimated fair value of AVLP property and equipment as of December 31, 2023 was $0,
and an impairment charge of $ 14.0 million was recognized.

 F- 29

31, 2023, the Company recognized an impairment charge of $ 3.9
 million related to property and equipment at ROI.

31, 2022, adverse changes in business climate, including decreases in the price of Bitcoin and resulting decrease in the market price
of miners, indicated that an impairment triggering event had occurred. Testing performed indicated the estimated fair value of the Company's
miners to be less than their net carrying value as of December 31, 2022, and an impairment charge of $ 79.6 million was recognized, decreasing
the net carrying value of the Company's Bitcoin mining equipment to their estimated fair value. The estimated fair value of the
Company's miners is classified in Level 2 of the fair value hierarchy due to the quoted market prices for similar assets.

 Compute North Bankruptcy

 On September 22, 2022, Compute
North Holdings, Inc. (along with its affiliated debtors, collectively, "Compute North"), filed for bankruptcy protection.
The Company had a deposit of approximately $ 2.0 million with Compute North for services yet to be performed by Compute North. The Company
assessed this financial exposure and recorded an impairment of the deposit totaling $2 million during the year ended December 31,
2022.

 11. INTANGIBLE ASSETS, NET

 At December 31, 2023 and 2022, intangible
assets consisted of:

 Schedule of intangible asset

 Definite lived intangible assets:

 Useful Life

2023

2022

 Developed technology

 3 - 8 years

 $
 1,949,000

 $
 24,584,000

 Customer list

 8 - 10 years

 3,596,000

 5,865,000

 Trade names

 5 - 10 years

 1,030,000

 4,316,000

 Domain name and other intangible assets

 5 years

 612,000

 630,000

 7,187,000

 35,395,000

 Accumulated amortization

 ( 1,910,000
)

 ( 2,102,000
)

 Total definite-lived intangible assets

 $
 5,277,000

 $
 33,293,000

 Indefinite lived intangible assets:

 Trade name and trademark

 Indefinite life

 477,000

 1,493,000

 Total intangible assets, net

 $
 5,754,000

 $
 34,786,000

 The Company's trademarks
and certain trade names were determined to have an indefinite life. The remaining definite lived intangible assets are primarily being
amortized on a straight-line basis over their estimated useful lives. Amortization expense was $ 1.0 million for each of the years ended
December 31, 2023 and 2022.

 The customer
relationships, developed technology and certain trade names are subject to amortization over their estimated useful lives, which
range between 5 and 10 years with an average remaining useful life of 7.9 years. The following table presents estimated amortization expense
for each of the succeeding five calendar years and thereafter.

 Schedule of estimated amortization expense

 2024

 $

 2025

 2026

 2027

 2028

 Thereafter

 1,657,000

 $
 5,277,000

 During
the year ended December 31, 2023, the Company recognized $ 24.7
 million and $ 1.5
 million impairment of intangible assets related to AVLP and Microphase, respectively. During the year ended December 31,
2022, the Company recognized no impairment of intangible assets. Intangible assets decreased $ 3.9 million during the year ended December 31, 2023 from the deconsolidation of SMC.

 12. GOODWILL

the changes in the Company's goodwill for the years ended December 31, 2023 and 2022:

 Schedule of goodwill

 Balance as of January 1, 2022

 $
 10,090,000

 Acquisition of AVLP

 18,570,000

 Acquisition of SMC

 3,184,000

 Acquisition of GIGA

 9,881,000

 Impairment of goodwill

 ( 13,064,000
)

 Effect of exchange rate changes

 ( 759,000
)

 Balance as of December 31, 2022

 27,902,000

 Impairment of goodwill

 ( 21,387,000
)

 Effect of exchange rate changes

 ( 427,000
)

 Balance as of December 31, 2023

 $
 6,088,000

 F- 30

31, 2023, the Company recognized $ 18.6 million and $ 3.2 million in impairment of goodwill related to AVLP and Microphase, respectively.
During the year ended December 31, 2022, the Company recognized $ 3.2 million and $ 9.9 million impairment of goodwill related to SMC and
GIGA, respectively.

 Impairment of AVLP Goodwill

 The Company tests the recorded
amount of goodwill for impairment on an annual basis on December 31 or more frequently if there are indicators that the carrying amount
of the goodwill exceeds its carried value. The Company performed a goodwill impairment test as of June 30, 2023 related to AVLP as there
were indicators of impairment related to certain unforeseen business developments and changes in financial projections.

 The valuation of AVLP was
determined using an income approach methodology of valuation. The income approach is based on the projected cash flows discounted to their
present value using discount rates, that in the Company's judgment, consider the timing and risk of the forecasted cash flows using
internally developed forecasts and assumptions. Under the income approach, the discount rate used is the average estimated value of a
market participant's cost of capital and debt, derived using customary market metrics. The analysis included assumptions regarding
AVLP's revenue forecast and discount rates of 26.7% using a weighted average cost of capital analysis. The market approach was also
considered; however, the income approach was chosen as the Company determined it was a better representation of AVLP's projected
long-term performance.

 The results of the quantitative
test indicated the fair value of the AVLP reporting unit did not exceed its carrying amounts, including goodwill, in excess of the carrying
value of the goodwill. As a result, the entire $ 18.6 million carrying amount of AVLP's goodwill was recognized as a non-cash impairment
charge during the year ended December 31, 2023.

 Impairment of Microphase Goodwill

 During the fourth quarter
of 2023, Microphase experienced a significant decline in sales and, as a result, the Company performed a goodwill impairment test as of
December 31, 2023.

 The valuation of Microphase
was determined using an income approach methodology of valuation. The income approach is based on the projected cash flows discounted
to their present value using discount rates, that in the Company's judgment, consider the timing and risk of the forecasted cash
flows using internally developed forecasts and assumptions. The market approach was also considered; however, the income approach was
chosen as the Company determined it was a better representation of Microphase's projected long-term performance.

 The results of the quantitative
test indicated the fair value of the Microphase reporting unit did not exceed its carrying amounts, including goodwill, in excess of the
carrying value of the goodwill. As a result, the entire $ 3.2 million carrying amount of Microphase's goodwill was recognized as
a non-cash impairment charge during the year ended December 31, 2023.

 Impairment of SMC Goodwill

 During the fourth quarter
of 2022, SMC experienced adverse changes in business climate, a significant decline in sales and a drop in the trading price of its common
stock.

 Due to these factors, the
Company determined that a triggering event had occurred, and therefore, performed a goodwill impairment assessment as of December 31,
2022. The valuation of the SMC reporting units was determined using a market approach with observable inputs, primarily based on the trading
price of SMC's common stock plus an estimated control premium of approximately 20%.

 The results of the quantitative
test indicated the fair value of the SMC reporting unit did not exceed its carrying amounts, including goodwill, in excess of the carrying
value of the goodwill. As a result, the entire $ 3.2 million carrying amount of SMC's goodwill was recognized as a non-cash impairment
charge during the year ended December 31, 2022.

 F- 31

 Impairment of GIGA Goodwill

 During the fourth quarter
of 2022, GIGA experienced a significant decline in sales and a drop in the trading price of its common stock.

 Due to these factors, the
Company determined that a triggering event had occurred, and therefore, performed a goodwill impairment assessment as of December 31,
2022. The valuation of the GIGA reporting units was determined using an income approach methodology of valuation.

 The income approach is based
on the projected cash flows discounted to their present value using discount rates, that in the Company's judgment, consider the
timing and risk of the forecasted cash flows using internally developed forecasts and assumptions. Under the income approach, the discount
rate used is the average estimated value of a market participant's cost of capital and debt, derived using customary market metrics.
The analysis included assumptions regarding GIGA's revenue forecast, with negligible or declining growth rates and discount rates
of 17.5% using a weighted average cost of capital analysis. The market approach was also considered; however, the income approach was
chosen as the Company determined it was a better representation of GIGA's projected long-term performance.

 The results of the quantitative
test indicated the fair value of the GIGA reporting unit did not exceed its carrying amounts, including goodwill, in excess of the carrying
value of the goodwill. As a result, the entire $ 9.9 million carrying amount of GIGA's goodwill was recognized as a non-cash impairment
charge during the year ended December 31, 2022.

 13. INVESTMENTS – RELATED PARTIES

 Investment in Promissory Note, Related Parties
– Ault & Company, Inc. ("Ault & Company")

 Investments in Ault &
Company, an affiliate, and Alzamend, a related party, at December 31, 2023 and 2022, were comprised of the following:

 Schedule of investment

 Due

 Rate

 Date

 2023

 2022

 Investment in promissory note of Ault & Company

 8 %

 Dec. 31, 2024

 $
 2,500,000

 $
 2,500,000

 Accrued interest receivable Ault & Company

 568,000

 368,000

 Other - Alzamend

 900,000

 -

 Total investment in promissory notes and other, related parties

 $
 3,968,000

 $
 2,868,000

 The Company recorded related
party interest income of $0.2 million for each of the years ended December 31, 2023 and 2022 in interest income.

 Investment in Common Stock, Related Parties
– Alzamend

 Schedule of investment of common stock

 Investments in common stock, related parties at December 31, 2023

 Cost

 Gross unrealized losses

 Fair value

 Common shares

 $
 24,688,000

 $
 ( 24,009,000
)

 $

 Investments in common stock, related parties at December 31, 2022

 Cost

 Gross unrealized losses

 Fair value

 Common shares

 $
 24,673,000

 $
 ( 18,224,000
)

 $

 F- 32

the changes in the Company's investments in Alzamend during the years ended December 31, 2023 and 2022:

 Schedule of investment in warrants and common stock

 Investment in

 common stock of

 Alzamend

 Investment in

 promissory notes and

 advances of Alzamend

 and Other

 Balance at January 1, 2022

 $
 13,230,000

 $
 173,000

 Investment in common stock of Alzamend

 4,901,000

 -

 Alzamend stock received for marketing services

 989,000

 -

 Unrealized loss in common stock of Alzamend

 ( 12,671,000
)

 -

 Amortization of related party investment

 -

 ( 173,000
)

 Balance at December 31, 2022

 -

 Investment in common stock of Alzamend

 15,000

 -

 Unrealized loss in common stock of Alzamend

 ( 5,785,000
)

 -

 Balance at December 31, 2023

 $

 $
 -

 Messrs. Ault, Horne and Nisser
are each paid $ 50,000 annually by Alzamend.

 14. EQUITY METHOD INVESTMENTS

 Equity Investments in Unconsolidated Entity
– AVLP

the changes in the Company's equity investments in an unconsolidated entity, AVLP, during the year ended December 31, 2022:

 Schedule of investments in an unconsolidated entity, AVLP

 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

 -

 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 December 31, 2022

 $
 -

 $
 -

 $
 -

 Equity Investments in Unconsolidated Entity
– SMC

 On
November 20, 2023, SMC, a consolidated VIE of the Company, completed a transaction pursuant to which SMC entered
into an agreement to sell 2.2 million shares of its common stock for $2.0 million to two affiliates of SMC, both of which are existing
shareholders with representation on the board of directors of SMC. As a result of the transaction, Ault Alliance's share ownership
of SMC was diluted to approximately 28%. As a result of SMC's transaction with its affiliates, the Company initiated a derivative
lawsuit against SMC and certain Board members. Due to the significant change in Ault Alliance's ownership and voting rights,
the Company determined that it no longer met the criteria of the primary beneficiary and, accordingly, the Company deconsolidated SMC
as of November 20, 2023. The Company recorded a $3.0 million loss on deconsolidation for the year ended December 31, 2023.

 Upon
deconsolidation, the Company recorded its $ 2.3 million retained investment in SMC based upon the fair value of the common shares
held by the Company at November 20, 2023. Due to the Company's significant influence over SMC, the Company began accounting for
its retained interest under the equity method of accounting.

the changes in the Company's equity investments in an unconsolidated entity, SMC, during the year ended December 31, 2023:

 Schedule of equity investments in unconsolidated entity
– SMC

 Rollforward investment in unconsolidated entity

 Amount

 Beginning balance - January 1, 2023

 $
 -

 Equity method investment in SMC upon deconsolidation

 2,259,000

 Loss from investment in unconsolidated entity

 ( 302,000
)

 Ending balance - December 31, 2023

 $
 1,957,000

 F- 33

 The following table provides
summarized financial information for the Company's ownership interest in SMC accounted for under the equity method for the December
31, 2023 period presented and has been compiled from SMC's financial statements. Amounts presented represent totals at the investee
level and not the Company's proportionate share:

 Summarized Statements of Operations

 Schedule of summarized statements of operations

 For the Year

 Ended

 2023

 Revenue

 $
 32,581,000

 Gross profit

 $
 6,964,000

 Loss from operations

 $
 ( 8,290,000
)

 $
 ( 9,384,000
)

 Summarized Balance Sheet Information

 Schedule of summarized balance sheet information

 2023

 Current assets

 $
 23,206,000

 Non-current assets

 $
 4,509,000

 Current liabilities

 $
 16,209,000

 Non-current liabilities

 $
 3,928,000

 15. CONSOLIDATED VARIABLE INTEREST ENTITY -
ALPHA FUND

 Alpha Fund – Consolidated Variable
Interest Entity

 As of December 31, 2022, the
Company held an investment in the Alpha Fund. The Alpha Fund was liquidated during the year ended December 31, 2023. Alpha Fund operated
as a private investment fund. The general partner of Alpha Fund, Ault Alpha GP LLC ("Alpha GP") was owned by Ault Capital
Management LLC (the "Investment Manager"), which also acted as the investment manager to Alpha Fund. The Investment Manager
was owned by Ault & Company. Messrs. Ault, Horne, Nisser and Cragun, who serve as executive officers and/or directors of the Company,
were executive officers of the Investment Manager, and Messrs. Ault, Horne and Nisser are executive officers and directors of Ault &
Company.

 Prior to the liquidation
of the Alpha Fund, the Company consolidated Alpha Fund as 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 was considered the primary beneficiary
of the VIE.

 16. BUSINESS COMBINATIONS

 ROI Acquisition

 On March 6, 2023, the Company
closed a share exchange agreement with ROI and sold to ROI all the outstanding shares of capital stock of the Company's subsidiary,
BitNile.com, Inc. as well as RiskOn360, Inc. (formerly known as Ault Iconic, Inc.) and the securities of Earnity, Inc. beneficially owned
by BitNile.com, Inc. as of the date of the Agreement. As consideration for the acquisition, ROI issued shares of preferred stock that
could have been convertible into common stock, subject to shareholder approval, of ROI representing approximately 73.2% of ROI's
outstanding common stock at the time of the transaction. Total consideration included $0.3 million purchase consideration, representing
the fair value of ROI common stock acquired by the Company, and $6.4 million allocated for the fair value of the non-controlling interest.

 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 million in principal and $ 5.9 million of accrued interest receivable at a conversion price of $ 0.50
per share and received 51,889,168 shares of common stock increasing its common stock ownership of AVLP from less than 20 % to approximately
 92 %.

 F- 34

 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 trade names and patents/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 of
20% for patents and developed technology and 0.25% for trademarks. The resulting net annual royalty payments are then discounted to present
value using a discount factor of 24.6%.

 Goodwill represents the excess
of the purchase price over the 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 Company invested in AVLP
based on the potential global impact of the novel technology of AVLP. AVLP has developed a novel cost effective and environmentally friendly
material synthesis technology for textile applications. AVLP's Multiplex Laser Surface Enhancement is a unique technology that has
the ability to treat both natural and synthetic textiles for a wide variety of functionalities, including dyeability and printing enhancements,
hydrophilicity, hydrophobicity, fire retardancy and anti-microbial properties. The use of water, harmful chemicals and energy is significantly
reduced in comparison to conventional textile treatment methods.

the allocation of the consideration transferred to the assets acquired and liabilities assumed based on their fair values.

 Schedule of business acquisitions by acquisition, contingent consideration

 Allocation

 Total purchase consideration

 $
 22,143,000

 Fair value of non-controlling interest

 7,790,000

 Total consideration

 $
 29,933,000

 Identifiable net liabilities assumed:

 Cash

 $
 1,245,000

 55,000

 Property and equipment

 5,057,000

 Intangible asset - patents/developed technology (not yet placed in service; upon being placed in service, 7 year estimated useful life)

 23,984,000

 Intangible asset - trademarks ( 9 year estimated useful life)

 816,000

 ( 4,689,000
)

 Deferred tax liability

 ( 5,000,000
)

 Convertible notes payable, principal

 ( 10,104,000
)

 Net assets assumed

 11,364,000

 $
 18,569,000

 F- 35

 The Company consolidates the
results of AVLP on a one-month lag, therefore the statements of operations include results for AVLP for the post-acquisition periods ended
November 30, 2023 and 2022.

 AVLP Related Party Transaction

 During the period from June
2022 to November 2022, MTIX Ltd., a subsidiary of AVLP, incurred fees of $ 0.3 million from 313M Technology Ltd, a U.K. company ("313M"),
for the use of facilities and personnel. The Managing Director of 313M is Kristina Mistry, the daughter of Pravin Mistry, who served as
a director of AVLP and the Chief Executive Officer of MTIX Ltd. at the time.

 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 December 31, 2022.

 SMC is a NASDAQ-listed seller
of consumer karaoke products. SMC leverages a top-tier global distribution network through major mass merchandisers and online retailers.

 As of June 15, 2022 ("Acquisition
Date"), the purchase price of the common stock acquired totaled $ 7.4 million and on June 15, 2022 a $ 3.1 million gain
was recognized in interest and other income for the remeasurement of the Company's previously held ownership interest to $ 10.5 million,
based on the trading price of SMC common stock. The Company also recognized non-controlling interest at fair value as of the Acquisition
Date in the amount of $ 10.3 million.

 The trade names 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
0.5% and 1.0% to the prospective revenue attributable to the intangible asset. The resulting net annual royalty payments are then discounted
to present value using a discount factor of 12.0%.

 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 3% organic growth rates, a discount rate of 12% using a weighted average cost
of capital analysis, and capital expenditure requirements associated with any new initiatives developed by SMC. 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 goodwill resulting from
this acquisition is not tax deductible.

the allocation of the consideration transferred to the assets acquired and liabilities assumed based on their fair values.

 Schedule of business acquisitions by acquisition, contingent consideration

 Allocation

 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

 9,891,000

 Prepaid expenses and other assets

 756,000

 12,840,000

 529,000

 Right-of-use assets

 1,073,000

 Intangible assets:

 Trade names ( 10 year estimated useful life)

 2,470,000

 Customer relationships ( 10 year estimated useful life)

 1,380,000

 Proprietary technology ( 3 year estimated useful life)

 600,000

 ( 10,052,000
)

 Notes payable

 ( 2,972,000
)

 Lease liabilities

 ( 1,124,000
)

 Net assets acquired

 17,669,000

 $
 3,184,000

 F- 36

 Overview of GIGA Acquisition

 On September 8, 2022, GIGA
 acquired 100% of the capital stock of Gresham Worldwide, Inc. ("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 were 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 by purchasing a convertible note that carries an interest rate of 10 % per annum and matured on February
14, 2023. The convertible note between the Company and GIGA is eliminated in consolidation beginning on September 8, 2022. The Company
received the right to appoint four members of a seven-member GIGA board of directors. These factors contributed to the Company's
determination that GWW be treated as the accounting acquirer.

 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 GIGA 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 ("ASC 805"). 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% beneficial ownership interest in GIGA. However, no single factor
was the sole determinant in the overall conclusion that GWW is the acquirer for accounting purposes; rather all factors were considered
in arriving at such conclusion.

 The fair value of the purchase
consideration was $ 9.5 million, consisting of $ 4.0 million for GIGA's common stock and prefunded warrants, $ 0.4 million fair value
of vested stock incentives, $ 3.7 million cash and $ 1.3 million related to an existing loan agreement between Ault Lending and GIGA, which
was deemed settled.

 The total purchase price to
acquire GIGA has been allocated to the assets acquired and assumed liabilities based upon 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 reports from a third-party valuation expert.

 The purchase price allocation
is as follows:

 Schedule of business acquisitions by acquisition, contingent consideration

 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

 2,930,000

 Prepaid expenses and other assets

 1,626,000

 Accounts payable and accrued liabilities

 ( 4,704,000
)

 Loans payable, net of discounts and issuance costs

 ( 387,000
)

 Lease obligations

 ( 491,000
)

 Net liabilities assumed

 ( 383,000
)

 $
 9,881,000

 F- 37

 Overview of Circle 8 Acquisition

 On November 17, 2022, Circle
8, a wholly owned subsidiary of Circle 8 Holdco LLC ("Circle 8 Holdco") entered into an asset purchase agreement ("Circle
8 Purchase Agreement") with Circle 8 Crane Services, LLC ("Seller"), to acquire substantially all of Seller's
operating assets and the recapitalization of the business into Circle 8. The Company has a 65 % direct ownership in Circle 8 Holdco and
a 5.8 % indirect ownership via Circle 8 Crane GP.

 In accordance with the Circle
8 Purchase Agreement, on December 16, 2022 ("Closing Date"), Circle 8 completed the acquisition and obtained control of the
Seller. The aggregate purchase price consideration transferred from Circle 8 to the Seller totaled $31.5 million which included (i) extinguishment
of debt amounting to $29.2 million (ii) rollover equity issued to the seller with an estimated fair value of $0.6 million (iii) contingent
consideration of $0.9 million and (iv) Seller's transaction expenses of $0.7 million. The following summarizes the fair value
of consideration transferred at the acquisition closing:

 Schedule of business acquisitions by acquisition, contingent consideration

 Extinguishment of debt

 $
 29,234,000

 Rollover equity

 565,000

 Contingent consideration – earn-out

 922,000

 Seller's transaction expenses reimbursement

 742,000

 Total consideration

 $
 31,463,000

 In conjunction with the acquisition,
certain individuals of the Seller's ownership group received rollover equity interest as purchase consideration. The rollover equity
includes Circle 8 issuing to the Seller 6,000 Class D interests in Circle 8 Holdco, which is the sole owner of the equity interests of
Circle 8. Management engaged a valuation specialist to estimate the fair value of the grants as of the Closing Date.

 Pursuant to the terms of the
Circle 8 Purchase Agreement, additional purchase consideration would be paid by Circle 8 to the Seller, contingent upon achievement of
a minimum EBITDA threshold for a three-year earn-out measurement period beginning on the day following the Closing Date and ending on
the date that is the 36-month anniversary of the Closing Date, which would then increase for additional EBITDA performance up to a maximum
ceiling. Pursuant to the terms of the Circle 8 Purchase Agreement, the earn-out would be paid to the Seller in an amount ranging from
$0 up to $0.7 million based on a pro rata basis for incremental EBITDA results starting at a minimum of $5.7 million. The fair value of
the earn-out was valued using the Monte Carlo simulation which estimates the fair value based on an analysis of various future outcomes.
As such the fair value measurement includes significant unobservable inputs such as risk-adjusted discount rate and projected results
of operations over the earn-out period, and thus, represented a Level 3 measurement. The fair value of the earn-out as of the Closing
Date was $0.9 million. To date, the year one earn-out measurement period has not been surpassed and thus, no cash payments have been made
from Circle 8 to the Seller for contingent purchase consideration.

 The acquisition was accounted
for as a business combination using the acquisition method of accounting in accordance with ASC 805. In accordance with ASU 2014-18, Business
Combinations (Topic 805): Accounting for Identifiable Intangible Assets in a Business Combination, the Company elected not to separately
recognize intangible assets that would otherwise arise from customer-related intangible assets. The value of these intangible assets is
effectively subsumed into goodwill.

 The purchase price has been
allocated to the tangible and intangible assets acquired and liabilities assumed at their estimated fair values on the acquisition date,
with the exception of the deferred income tax assets acquired and liabilities assumed which are recognized and measured in accordance
with ASC 740, Income Taxes. The excess of the fair value of purchase consideration over the values of the identifiable assets and liabilities
is recorded as goodwill.

 The acquisition resulted in
the fair value of the net assets acquired exceeding the amount of consideration transferred, which occurred as a result of negotiations
with the Seller at a time of depressed EBITA as well as imposing a requirement on the Seller to provide preliminary net working capital
equal to or greater than $3.0 million without the ability for adjustments up or down. ASC 805 refers to this as a "bargain purchase"
and requires Circle 8 to recognize a gain for the amount that the values assigned to the net assets acquired exceed the consideration
transferred and cannot recognize goodwill from the acquisition.

 Consequently, the Company
reassessed the recognition and measurement of identifiable assets acquired, and liabilities assumed and concluded that all acquired assets
and assumed liabilities were recognized and that the valuation procedures and resulting measures were appropriate. As a result, the Company
recognized a gain of $0.8 million. The gain is included in the line item "gain from bargain purchase of business" in the consolidated
statement of operations.

 F- 38

the estimated fair values of the assets acquired and liabilities assumed at the acquisition date:

 Schedule of recognized identified assets acquired and liabilities assumed

 Assets

 $
 290,000

 Trade receivable, net

 4,334,000

 Prepaids and other current assets

 1,226,000

 36,395,000

 Right-of-use assets

 1,558,000

 Intangible assets – trade name ( 10 year estimated useful life)

 1,030,000

 Intangible assets – customer relationships ( 8 year estimated useful life)

 1,290,000

 Total Assets

 $
 46,123,000

 Liabilities

 Accounts payable and accrued liabilities

 $
 ( 1,589,000
)

 Notes payable – equipment notes

 ( 10,685,000
)

 Operating lease liabilities

 ( 1,580,000
)

 Total Liabilities

 $
 ( 13,854,000
)

 Net Assets Acquired

 $
 32,269,000

 The fair value of the acquired
trade accounts receivables approximates the carrying value due to the short-term nature of the expected timeframe to collect the amounts
due and the contractual cash flows, which are expected to be collected related to these receivables.

 As part of the purchase price
allocation, the Company determined the identifiable intangible assets were: (i) trade name and (ii) customer relationships. The fair value
of the intangible assets was estimated using variations of the income approach. Specifically, the relief from royalty method was utilized
to estimate the fair value of the trade name and the multi-period excess earnings method was utilized to estimate the fair value of the
customer relationships. The trade name relates to the overall consolidated group name and related industry recognition. The customer relationships
represent a source of repeat business that is critical to the operations providing crane operators, engineering, custom rigging and transportation
services for oilfield, construction, commercial and infrastructure markets. The discounted cash flows were based on estimates used to
price the transaction, and the discount rates applied were benchmarked with reference to the implied rate of return from the transaction
model and the weighted average cost of capital. These nonrecurring fair value measurements are primarily determined using unobservable
inputs. Accordingly, these fair value measurements are classified within Level 3 of the fair value hierarchy.

 Unaudited Pro Forma Financial Information

 The following unaudited pro
forma consolidated results of operations for the year ended December 31, 2022 have been prepared as if the AVLP, SMC, GIGA and Circle
8 acquisitions had occurred on January 1, 2022. This table has been prepared for comparative purposes only and is not indicative of the
actual results that would have been attained had the acquisition occurred as of the beginning of the periods presented, nor is it indicative
of future results.

 Business acquisition, pro forma information

 For the Year

 Ended

 2022

 Total revenues

 $
 214,636,000

 Net loss attributable to Ault Alliance, Inc.

 $
 ( 185,957,000
)

 17. STOCK-BASED COMPENSATION

 The Company provides stock-based
compensation to directors, employees and consultants under the (i) 2021 Stock Incentive Plan, which was approved by stockholders on August
13, 2021 at the 2021 Annual Meeting of Stockholders and which reserved 1,000 shares of common stock for grant of awards under the plan
and (ii) 2022 Stock Incentive Plan, which was approved by stockholders on November 23, 2022 at the 2022 Annual Meeting of Stockholders
and which reserved 10,000 shares of common stock for grant of awards under the plan.

 F- 39

 Options granted under the
plans have an exercise price equal to or greater than the fair value of the underlying common stock at the date of grant and become exercisable
based on a vesting schedule determined at the date of grant. Typically, options granted generally become fully vested after four
years. Any options that are forfeited or cancelled before expiration become available for future grants. The options expire between 5
and 10 years from the date of grant. Restricted stock awards granted under the plan are subject to a vesting period determined at
the date of grant. As of December 31, 2023, an aggregate of 10,441 shares of the Company's common stock were available for future
grant.

 The options outstanding as
of December 31, 2023, have been classified by exercise price, as follows:

 Schedule of exercise price

 Outstanding

 Exercisable

 Remaining

 Contractual

 Price

 Outstanding

 Life (Years)

 Price

 Exercisable

 Price

 $
 16,091 - $ 19,628

 7.8

 $
 17,546

 $
 17,577

 Issuances outside of the Plan

 $
 13,425

 6.7

 $
 13,425

 $
 13,425

 $
 19,125

 7.3

 $
 19,125

 $
 2,284

 $
 13,425 - $ 19,125

 7.1

 $
 17,278

 $
 17,278

 Total Options

 $
 13,425 - $ 19,628

 7.5

 $
 17,423

 $
 17,411

 The total stock-based compensation
expense related to stock options and stock awards issued to the Company's employees, consultants and directors, included in reported
net loss for the year ended December 31, 2023 and 2022, was comprised as follows:

 Schedule of stock-based compensation expense

 Year Ended December 31,

 2023

 2022

 General and administrative

 $
 10,868,000

 $
 7,202,000

 Total stock-based compensation

 $
 10,868,000

 $
 7,202,000

 A summary of option activity
under the Company's stock option plans as of December 31, 2023 and 2022, and changes during the years ended is as follows:

 Schedule of option activity

 Outstanding Options

 Remaining

 Aggregate

 Available

 Contractual

 Intrinsic

 for Grant

 of Options

 Price

 Life (years)

 Value

 January 1, 2022

 $
 18,900

 9.8

 $

 Authorized

 10,000

 -

 Forfeited

 ( 31
)

 $
 19,950

 December 31, 2022

 10,410

 $
 18,675

 8.7

 $

 Forfeited

 ( 1
)

 $
 39,157

 December 31, 2023

 10,411

 $
 17,546

 7.8

 $

 As of December 31, 2023, there
was $ 2.1 million of unrecognized compensation cost related to non-vested stock-based compensation arrangements granted under the plans.
That cost is expected to be recognized over a weighted average period of 1.5 years.

 F- 40

 18. WARRANTS

 A summary of warrant activity
for the years ended December 31, 2023 and 2022 is presented below.

 Schedule of warrants

 Warrants

 Weighted-

 Exercise Price

 Weighted-

 Remaining

 Contractual

 Life (Years)

 Outstanding at January 1, 2022

 2,669

 $
 23,175

 4.7

 Granted

 1,209

 4,500

 Forfeited

 ( 1
)

 4,554,717

 Exercised

 ( 1,803
)

 16,618

 Outstanding at December 31, 2022

 2,074

 16,835

 3.9

 Granted

 14,176,472

 3.55

 Forfeited

 -

 -

 Exercised

 -

 -

 Outstanding at December 31, 2023

 14,178,546

 $
 5.10

 4.7

information about common stock warrants outstanding at December 31, 2023:

 Schedule of common stock warrants outstanding

 Outstanding

 Exercisable

 Remaining

 Contractual

 Price

 Outstanding

 Life (Years)

 Price

 Exercisable

 Price

 $
 3.38

 12,269,032

 4.77

 $
 3.38

 -

 $
 4.59

 1,907,440

 4.60

 $
 4.59

 -

 $
 3,375 - $ 18,750

 2,067

 2.72

 $
 10,3801

 2,067

 $
 10,381

 $
 66,000 - $ 148,500

 0.24

 $
 84,643

 $
 84,643

 $
 3.38 - $ 148,500

 14,178,546

 4.75

 $
 5.10

 2,074

 $
 10,631

 Warrant Issuances During 2023

31, 2023, the Company issued warrants to purchase 14.2 million shares of Class A common stock at a weighted average exercise price of
$ 3.54 per share, subject to adjustment, in connection with the issuance of a senior secured convertible promissory note, related party
(see Note 24) and Series C convertible preferred stock, related party (see Note 26).

 Warrant Issuances During 2022

 On November 7, 2022, the Company
issued warrants to purchase 606 shares of common stock at exercise price equal to $3,375 per share and warrants to purchase 606 shares
of common stock at exercise price equal to $ 5,625 per share, subject to adjustment in connection with the issuance of secured promissory
notes in the aggregate principal face amount of $ 18.9 million.

 The Company has valued the
warrants issued at their date of grant utilizing the Black-Scholes option pricing model. This model is dependent upon several variables
such as the warrants' remaining contractual term, exercise price, current stock price, risk-free interest rate and estimated volatility
of the Company's stock over the contractual term of the warrants. The risk-free interest rate used in the calculations is based
on the implied yield available on U.S. Treasury issues with an equivalent term approximating the contractual life of the warrants.

 The Company utilized a variety
of pricing models and the weighted average assumptions used during the years ended December 31, 2023 and 2022 were as follows:

 Schedule of weighted average assumptions

 2023

 2022

 Exercise price

 $
 3.54

 $
 4,500

 Contractual term in years

 5.0

 4.0

 Volatility

 %

 %

 Dividend yield

 %

 %

 Risk-free interest rate

 4.0
 %

 4.5
 %

 F- 41

 19. ACCOUNTS PAYABLE AND ACCRUED EXPENSES

 Other current liabilities at December
31, 2023 and 2022 consisted of:

 Schedule of other current liabilities

 2023

 2022

 Accounts payable

 $
 32,592,000

 $
 20,027,000

 Accrued payroll and payroll taxes

 9,779,000

 9,789,000

 Financial instrument liabilities

 832,000

 651,000

 Interest payable

 4,197,000

 3,207,000

 Accrued legal

 2,340,000

 3,168,000

 Accrued lender profit participation rights

 -

 6,000,000

 Other accrued expenses

 16,703,000

 17,586,000

 Total liabilities

 $
 66,443,000

 $
 60,428,000

the changes in financial instrument liabilities measured and carried at fair value on a recurring basis with the use of significant unobservable
inputs (Level 3) for the years ended December 31, 2023 and 2022:

 Schedule of changes in financial instrument liabilities

 2023

 2022

 Beginning balance

 $
 651,000

 $
 4,249,000

 Recognition of financial instrument liabilities

 7,262,000

 290,000

 Change in fair value

 ( 7,081,000
)

 377,000

 Transfer out of level 3

 -

 ( 4,265,000
)

 Ending balance

 $
 832,000

 $
 651,000

 20. LEASES

 The Company has operating leases for office space. The Company's leases have remaining lease terms of 12 months to 9.5
years, some of which may include options to extend the leases perpetually, and some of which may include options to terminate the
leases within one year.

 The following table provides a summary of leases by balance sheet category as of December 31, 2023 and 2022:

 Schedule of supplemental balance sheet information related to leases

2023

2022

 Operating right-of-use assets

 $
 6,315,000

 $
 8,419,000

 Operating lease liability - current

 2,119,000

 2,975,000

 Operating lease liability - non-current

 4,402,000

 5,836,000

 The components of lease expenses for the years ended December 31, 2023 and 2022, were as follows:

 Schedule of lease expenses

 Year Ended December 31,

 2023

 2022

 Operating lease cost

 $
 3,677,000

 $
 2,716,000

 Short-term lease cost

 -

 -

 The following tables provides a summary of other information related to leases for the years ended December 31, 2023 and
2022:

 Schedule of supplemental cash flow information related to leases

 December 31, 2023

 December 31, 2022

 Cash paid for amounts included in the measurement of lease liabilities:

 Operating cash flows from operating leases

 $
 3,699,000

 $
 2,554,000

 Right-of-use assets obtained in exchange for new operating lease liabilities

 $
 885,000

 $
 3,791,000

 Weighted-average remaining lease term - operating leases

 3.7 years

 4.1 years

 Weighted-average discount rate - operating leases

 8.0
 %

 7.0
 %

 Maturity of lease liabilities under the Company's non-cancellable operating leases as of December 31, 2023, were as follows:

 Schedule of maturities of operating lease liabilities

 Payments due by period

 2024

 $
 2,674,000

 2025

 2,205,000

 2026

 1,258,000

 2027

 414,000

 2028

 357,000

 Thereafter

 759,000

 Total lease payments

 7,667,000

 Less interest

 ( 1,146,000
)

 Present value of lease liabilities

 $
 6,521,000

 F- 42

 21. NOTES PAYABLE

 Notes payable at December
31, 2023 and 2022, were comprised of the following:

 Schedule of notes payable

 Collateral

 Guarantors

 rate

 Due date

 2023

 2022

 Circle 8 revolving credit facility

 Circle 8 cranes with a book value of $31.7 million

 -

 8.4 %

 December 16, 2025

 $
 15,907,000

 $
 14,724,000

 8.5% secured promissory notes

 -

 -

 8.5 %

 May 7, 2024

 -

 17,389,000

 16% promissory note (in default at December 31, 2023)

 -

 Ault & Company and

 Milton C. Ault, III

 16.0 %

 December 16, 2023

 2,572,000

 17,456,000

 Circle 8 equipment financing notes

 Circle 8 equipment with a book value of $3.9 million

 -

 0.0 %

 March 15, 2024 through

 November 15, 2026

 5,629,000

 10,677,000

 3% secured promissory notes

 -

 -

 3.0 %

 -

 5,672,000

 8% demand loans

 -

 -

 8.0 %

 950,000

 -

 Short-term bank credit facilities

 -

 -

 5.9 %

 Renews monthly

 1,464,000

 1,702,000

 XBTO note payable (in default at December 31, 2023 and repaid in March 2024)

 2,482 Antminers with a book value of $3.4 million

 -

 12.5 %

 December 30, 2023

 1,067,000

 2,749,000

 10% secured promissory notes

 -

 -

 10.0 %

 -

 8,789,000

 Other ($0.9 million in default at December 31, 2023)

 -

 -

 3,518,000

 2,619,000

 Total notes payable

 -

 -

 $
 31,107,000

 $
 81,777,000

 Less:

 -

 -

 Unamortized debt discounts

 -

 -

 ( 83,000
)

 ( 12,325,000
)

 Total notes payable, net

 -

 -

 $
 31,024,000

 $
 69,452,000

 Less: current portion

 -

 -

 ( 12,866,000
)

 ( 39,621,000
)

 Notes payable – long-term portion

 -

 -

 $
 18,158,000

 $
 29,831,000

 During the year ended
December 31, 2023, the holders of $ 8.4
million 10% secured promissory notes exchanged their notes and accrued interest for Series E, Series F and Series G preferred stock
liabilities. The Company recorded a loss on extinguishment of debt of $0.1
million related to the transaction. When the Series E, Series F and Series G preferred stock liabilities converted to Series A Common stock, the
Company recorded a loss on extinguishment of $ 1.5 million.

 During the year ended December 31, 2023, the holders of $ 10.5 million
10% demand promissory notes and $ 1.1 million 12% demand promissory notes exchanged their notes for notes from Ault & Company (see
Note 22), resulting in a loss on extinguishment of debt of $ 0.4 million.

 In connection with the December 2023 Series C Preferred Stock offering
(see Note 26), the Company paid $20.4 million to pay the $20.2 million outstanding balance of the 8% senior secured promissory notes,
plus $0.2 million accrued interest payable. The 8% senior secured promissory notes had an unamortized debt discount of $ 3.2 million outstanding,
which was recorded as a loss on extinguishment of debt.

 The Company recorded a $ 2.0
million loss on extinguishment of debt related to the April 2023 restructuring related to one of the 16% promissory notes payable.

 F- 43

 Notes Payable Maturities

 The contractual maturities
of the Company's notes payable, assuming the exercise of all extensions that are exercisable solely at the Company's option,
as of December 31, 2023 were:

 Schedule Of maturities

 Year

 2024

 $
 12,866,000

 2025

 17,721,000

 2026

 418,000

 2027

 51,000

 2028

 51,000

 $
 31,107,000

 Interest Expense

 Schedule of interest expense

 2023

 2022

 Contractual interest expense

 $
 9,619,000

 $
 6,780,000

 Forbearance fees

 5,469,000

 1,453,000

 Amortization of debt discount

 21,507,000

 29,109,000

 Total interest expense

 $
 36,595,000

 $
 37,342,000

 22. NOTES PAYABLE, RELATED PARTY

 Notes payable, related party
at December 31, 2023 and December 31, 2022, were comprised of the following:

 Schedule of notes payable, related party

rate

 Due date

2023

2022

 Notes from officers - AAI

 18%

 February 1, 2024*

 $

 98,000

 $

 -

 Notes from officers - TurnOnGreen

 14%

 Past due

 51,000

 25,000

 Notes from board member - ROI

 18%

 January 19, 2024*

 90,000

 -

 Ault & Company advances

 No interest

 1,909,000

 -

 Advances from officers - AAI

 No interest

 -

 300,000

 Advances from officers - TurnOnGreen

 No interest

 -

 14,000

 Advances from officers - GIGA

 8%

 52,000

 -

 Other related party advances

 No interest

 175,000

 13,000

 Total notes payable

 $

 2,375,000

 $

 352,000

 F- 44

 Ault & Company
Loan Agreement

 On June 8, 2023, the Company entered into a loan agreement with Ault
& Company as lender. The loan agreement provides for an unsecured, non-revolving credit facility in an aggregate principal amount
of up to $ 10 million. All loans under the loan agreement are due within five business days after request by Ault & Company. Ault &
Company is not obligated to make any further advances under the loan agreement after December 8, 2023. Advances under the loan agreement
bear interest at the rate of 9.5 % per annum and may be repaid at any time without penalty or premium. As of December 31, 2023, $ 4.6 million
has been advanced under the loan agreement and was exchanged for a senior secured convertible promissory note with Ault & Company
(see Note 24).

 In August 2023, Ault & Company assumed $11.6 million of secured
promissory notes previously issued by the Company for which the Company has issued term notes to Ault & Company in the same amount.
One term note has a principal amount of $1.1 million and bears interest at 12% and the second term note has a principal amount of $10.5
million and bears interest at 10%. These assumed loans were exchanged for a senior secured convertible promissory note with Ault &
Company (see Note 24).

 Summary
of interest expense, related party, recorded within interest expense on the condensed consolidated statement of operations:

 Schedule of interest expense, related party

 2023

 2022

 Interest expense, related party

 $
 664,000

 $
 -

 23. CONVERTIBLE NOTES PAYABLE

 Convertible notes payable
at December 31, 2023 and 2022, were comprised of the following:

 Schedule
of convertible notes payable

 Conversion price per

 share

 Interest rate

 Due date

 2023

 2022

 Convertible promissory note

 $ 4.00

 4 %

 May 10, 2024

 $
 -

 $
 660,000

 Convertible promissory note – original issue discount ("OID") only

 90 % of 5-day VWAP

 OID Only

 September 28, 2024

 1,673,000

 -

 AVLP convertible promissory notes, principal

 $ 0.35 (AVLP stock)

 7 %

 August 22, 2025

 9,911,000

 9,911,000

 GIGA senior secured convertible notes - in default

 $ 0.25 (GIGA stock)

 18 %

 October 11, 2024

 4,388,000

 -

 ROI senior secured convertible note

 $ 0.11 (ROI stock)

 OID Only

 April 27, 2024

 6,513,000

 -

 Fair value of embedded conversion options

 910,000

 2,316,000

 Total convertible notes payable

 23,395,000

 12,887,000

 Less: unamortized debt discounts

 ( 2,179,000
)

 ( 111,000
)

 Total convertible notes payable, net of financing cost, long term

 $
 21,216,000

 $
 12,776,000

 Less: current portion

 ( 11,763,000
)

 ( 1,325,000
)

 Convertible notes payable, net of financing cost – long-term portion

 $
 9,453,000

 $
 11,451,000

 The contractual maturities
of the Company's convertible notes payable, assuming the exercise of all extensions that are exercisable solely at the Company's
option, as of December 31, 2023, were:

 Schedule
of contractual maturities

 Year

 Principal

 2024

 $
 12,574,000

 2025

 10,821,000

 $
 23,395,000

 Significant
inputs associated with the embedded conversion options include:

 Schedule of weighted average assumptions

 December 31, 2023

 December 31, 2022

 At Inception

 Contractual term in years

 0.3

 2.7

 1.0

 Volatility

 138 %

 82 %

 111 %

 Dividend yield

 0 %

 0 %

 0 %

 Risk-free interest rate

 3.8 %

 4.0 %

 3.5 %

 F- 45

 The
following table summarizes the changes in embedded conversion
option derivative liabilities measured and carried at fair value on a recurring basis with the
use of significant unobservable inputs (Level 3) for the years ended December 31, 2023 and 2022:

 Schedule of derivative liabilities

 2023

 2022

 Beginning balance

 $
 2,316,000

 $
 -

 Fair value of embedded conversion options issued or acquired

 1,652,000

 5,851,000

 Change in fair value

 ( 3,058,000
)

 ( 3,535,000
)

 Ending balance

 $
 910,000

 $
 2,316,000

 The
following table summarizes the changes in convertible notes payable measured and carried at fair value on a recurring basis with the use
of significant unobservable inputs (Level 3) for the years ended December 31, 2023 and 2022:

 Schedule of convertible notes payable

 2023

 2022

 Beginning balance

 $
 10,571,000

 $
 660,000

 Convertible notes from acquisitions

 -

 9,911,000

 Issuance of convertible notes

 12,441,000

 -

 Transfer out of level 3

 ( 527,000
)

 -

 Ending balance

 $
 22,485,000

 $
 10,571,000

 In
October 2023 GIGA entered into an exchange and waiver agreement related to its senior secured convertible promissory notes, which resulted
in a loss on extinguishment of debt of $ 1.4 million.

 24. SENIOR SECURED CONVERTIBLE NOTE, RELATED PARTY

 On October 13, 2023 (the "A&C
Closing Date"), the Company entered into a note purchase agreement with Ault & Company, pursuant to which the Company sold to
Ault & Company (i) a senior secured convertible promissory note in the principal face amount of $17.5 million (the "Note")
and warrants (the "Warrants") to purchase shares of the Company's common stock for a total purchase price of up to $ 17.5
million (the "Transaction").

 The purchase price was comprised
of the following: (i) cancellation of $4.6 million of cash loaned by Ault & Company to the Company since June 8, 2023 pursuant to
the loan agreement; (ii) cancellation of $11.6 million of term loans made by the Company to Ault & Company in exchange for Ault &
Company assuming liability for the payment of $11.6 million of secured notes; and (iii) the retirement of $1.25 million stated value of
125,000 shares of the Company's Series B Convertible Preferred Stock (representing all shares issued and outstanding of that series)
being transferred from Ault & Company to the Company.

 The Note had a principal face amount of $17.5 million and had a maturity
date of October 12, 2028 (the "Maturity Date"). The Note bore interest at the rate of 10 % per annum. The Note was repaid in
full in December 2023 and the Company recorded a $ 4.2 million loss on extinguishment for the year ended December 31, 2023.

 The Warrants grant Ault &
Company the right to purchase 1.9 million shares of common stock. The Warrants have a five-year term, expiring on the fifth anniversary
of the A&C Closing Date, and become exercisable on the first business day after the six-month anniversary of the A&C Closing Date.
The exercise price of the Warrants is $ 4.5925, which is subject to adjustment in the event of customary stock splits, stock dividends,
combinations or similar events.

 The Company elected the fair
value option and utilized a Monte-Carlo simulation at inception to value the Note. The Monte-Carlo simulation is calculated as the average
present value over all simulated paths. The key inputs and assumptions used in the Monte-Carlo Simulation, including volatility, estimated
market yield, risk-free rate, the probability of various scenarios, including held to maturity and subsequent preferred stock offering
and various simulated paths, were utilized to estimate the fair value at $17.8 million or approximately the principal amount outstanding
as of inception. The value of the 2023 Note was calculated as the average present value over 25,000 simulated paths. Given the Notes were
fully satisfied in connection with issuance of the Series C convertible preferred stock, the Company calculated the fair value on the
date of extinguishment as the total principal plus accrued interest outstanding.

 F- 46

some of the significant inputs and assumptions used in the Monte-Carlo simulation:

 Schedule of senior secured convertible promissory note assumptions

 Senior secured convertible promissory note

 Amounts

 Principal outstanding at valuation date

 $ 17.5 million

 Volatility

 80 %

 Interest rate

 10.0 %

 Risk-free interest rate range

 4.7 % to 5.6 %

 Estimated yield

 19.5 % to 21.0 %

 The Company computed the fair value of the warrants using the Black-Scholes
option pricing model and, as a result of this calculation, recorded debt discount in the amount of $4.2 million based on the estimated
fair value of the Warrants.

 In addition to a 21% discount
for lack of marketability, significant inputs associated with the calculation of the fair value of the Warrants included the following:

 Schedule of convertible note

 Contractual term in years

 5.0

 Volatility

 167.3 %

 Dividend yield

 0 %

 Risk-free interest rate

 4.7 %

 The rollforward of the senior
secured convertible promissory note notes is as follows:

 Schedule of senior
secured convertible promissory note

 Senior secured convertible promissory note

 Total

 Balance as of December 31, 2022

 $

 -

 Exchange of loan agreement with Ault & Company

 4,625,000

 Ault & Company note from exchange of 12% demand promissory note

 1,100,000

 Ault & Company note from exchange of 10% demand promissory note

 10,545,000

 Exchange of Series B convertible preferred stock

 1,250,000

 Cash payments of senior secured convertible promissory note

 ( 150,000

)

 Payment from issuance of Series C preferred stock

 ( 17,370,000

)

 Balance as of December 31, 2023

 $

 -

 25. COMMITMENTS AND CONTINGENCIES

 Contingencies

 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.

 As of December 31, 2023 the
Company has accrued $ 2.3
 million as a loss contingency related to litigation matters.

 F- 47

 26. STOCKHOLDERS' EQUITY

 Preferred Stock

 The
Company is authorized to issue 25.0 million shares of preferred stock, $0.001 par value. As of December 31, 2023, the Board has designated
 1,000,000 shares as Series A Convertible Preferred Stock (the "Series A Preferred Stock"), 50,000 shares as Series C Convertible
Preferred Stock (the "Series C Preferred Stock") and 2,000,000 shares as 13.00% Series D Cumulative Redeemable Perpetual Preferred
Stock (the "Series D Preferred Stock"). As of December 31, 2023, the rights, preferences, privileges and restrictions on the
remaining authorized 22.0 million shares of preferred stock have not been determined. The Board is authorized to designate a new series
of preferred shares and determine the number of shares, as well as the rights, preferences, privileges and restrictions granted to or
imposed upon any series of preferred shares.

 On January 23, 2023, the Company filed a Certificate of Elimination
of the certificate of designations of preferred stock with the Secretary of State of the state of Delaware with respect to the Company's
Series C convertible preferred stock, par value $ 0.001 per share.

 On November 15, 2023, the Company filed a new Certificate of Designations
of Preferences, Rights and Limitations of Series C Convertible Preferred Stock with the Secretary of State of the State of Delaware to
establish the preferences, limitations and relative rights of the Series C Preferred Stock.

 On
December 8, 2023, the Company filed a Certificate of Elimination of the certificate of designations of preferred stock with the Secretary
of State of the state of Delaware with respect to the Company's Series B convertible preferred stock, par value $ 0.001 per share.

 Common Stock

 Common stock confers upon
the holders the rights to receive notice to participate and vote at any meeting of stockholders of the Company, to receive dividends,
if and when declared, and to participate in a distribution of surplus of assets upon liquidation of the Company. The Class B common stock
carries the voting power of 10 shares of Class A common stock, referred to herein as the common stock.

 2023 Issuances

 Common ATM Offerings

 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 million from time to time, through
an "at the market offering" program (the "2022 Common ATM Offering"). During the three months ended March 31,
2023, the Company sold an aggregate of 4,268 shares of common stock pursuant to the 2022 Common ATM Offering for gross proceeds of $ 4.2 million.
Effective March 17, 2023, the 2022 Common ATM Offering was terminated.

 On
June 9, 2023, the Company entered into an At-The-Market issuance sales agreement with Ascendiant Capital to sell shares of common stock
having an aggregate offering price of up to $ 10 million from time to time, through an "at the market offering" program
(the "2023 Common ATM Offering"). On July 13, 2023 and September 8, 2023, the sales agreement was amended increasing the size
of the 2023 ATM Offering to $20 million and $50 million, respectively. During the year ended December 31, 2023, the Company sold an aggregate
of 4.3 million shares of common stock pursuant to the 2023 Common ATM Offering for gross proceeds of $ 35.3 million.

 Preferred ATM
Offering

 On
June 14, 2022, the Company entered into an At-The-Market sales agreement 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 $ 46.4 million (the "2022 Preferred ATM Offering").
During the year ended December 31, 2023, the Company sold an aggregate of 252,359 shares of Series D Preferred Stock pursuant
to the 2022 Preferred ATM Offering for net proceeds of $ 2.9 million. Effective June 16, 2023, the 2022 Preferred ATM Offering was
terminated.

 Issuance of Common
Stock Upon Conversion of Preferred Stock

 During
the year ended December 31, 2023, the Investors converted 1,000 shares of Series F Preferred Stock and 6,756 shares
of Series G Preferred Stock into an aggregate of 5,736 shares of the Company's common stock. A loss on extinguishment
of $0.3 million was recognized on the issuance of common stock based on the fair value of the Company's common stock at the date
of the conversions.

 Proceeds from Subsidiaries'
Sale of Stock to Non-Controlling Interests

 During
the year ended December 31, 2023, SMC and ROI sold an aggregate of $ 7.3 million of common stock to non-controlling interests.

 Series C Convertible Preferred Stock Offering,
Related Party

 On December 14, 2023, pursuant
to the November 2023 SPA entered into with Ault & Company on November 6, 2023, the Company sold to Ault & Company, in three separate
closings that occurred on the closing date, an aggregate of 41,500 shares of Series C Preferred Stock and Warrants to purchase 12.3 million
shares of common stock, for a total purchase price of $ 41.5 million.

 F- 48

 The proceeds from the sale
of Series C Preferred Stock were used in part to pay $ 17.5 million to satisfy the outstanding balance on the outstanding senior secured
convertible promissory note with Ault & Company. The senior secured convertible promissory note with Ault & Company had an unamortized
debt discount of $ 4.2 million outstanding, which was recorded as a loss on extinguishment of debt.

 In addition, the Company paid
$ 20.4 million to pay the $20.2 million outstanding balance of the 8% senior secured promissory notes, plus $ 0.2 million accrued interest
payable. The 8% senior secured promissory notes had an unamortized debt discount of $ 3.2 million outstanding, which was recorded as a
loss on extinguishment of debt.

 On December 14, 2023, the
 Company, along with its wholly owned subsidiaries Sentinum, Third Avenue, ACS, BNI Montana, Ault Lending, Ault Aviation, LLC ("Ault
Aviation") and AGREE (collectively with the Company, Sentinum, Third Avenue, ACS, BNI Montana, Ault Lending and Ault Aviation, the
"Guarantors") entered into a Loan and Guaranty Agreement (the "Loan Agreement") with institutional lenders, pursuant
to which Ault & Company borrowed $36 million and issued secured promissory notes to the lenders in the aggregate amount of $38.9 million
(collectively, the "Secured Notes"; and the transaction, the "Loan").

 Pursuant to the Loan Agreement,
the Guarantors, as well as Milton C. Ault, III, the Company's Executive Chairman and the Chief Executive Officer of Ault & Company,
agreed to act as guarantors for repayment of the Secured Notes. In addition, certain Guarantors entered into various agreements as collateral
in support of the guarantee of the Secured Notes, including (i) a security agreement by Sentinum, pursuant to which Sentinum granted to
the Lenders a security interest in (a) 19,226 Antminers (the "Miners"), (b) all of the digital currency mined or otherwise
generated from the Miners and (c) the membership interests of ACS, (ii) a security agreement by the Company, Ault Lending, BNI Montana
and AGREE, pursuant to which those entities granted to the lenders a security interest in substantially all of their assets, as well as
a pledge of equity interests in Ault Aviation, AGREE, Sentinum, Third Avenue, Ault Energy, LLC, the Company's wholly owned subsidiary,
ADTC, Eco Pack Technologies, Inc., the Company's wholly owned subsidiary, and Circle 8 Holdco, (iii) a mortgage and security agreement
by Third Avenue on the real estate property owned by Third Avenue in St. Petersburg, Florida (the "Florida Property"), (iv)
a future advance mortgage by ACS on the real estate property owned by ACS in Dowagiac, Michigan (the "Michigan Property"),
(v) an aircraft mortgage and security agreement by Ault Aviation on a private aircraft owned by Ault Aviation (the "Aircraft"),
and (vi) deposit account control agreements over certain bank accounts held by certain of the Company's subsidiaries.

 In addition, pursuant to the Loan Agreement, the Company agreed to
establish a segregated deposit account (the "Segregated Account"), which would be used as a further guarantee of repayment
of the Secured Notes. $3.5 million of cash was paid into the Segregated Account on the closing date. The Company is required to have the
minimum balance in the Segregated Account be not less than $7 million, $15 million, $20 million and $27.5 million on the four-month, nine-month,
one-year and two-year anniversaries of the closing date, respectively. In addition, starting on March 31, 2024, the Company is required
to deposit $0.3 million monthly into the Segregated Account, which increases to $0.4 million monthly starting March 31, 2025. Further,
the Company agreed to deposit into the Segregated Account, (i) up to the first $7 million of net proceeds, if any, from the sale of the
Hilton Garden Inn in Madison West, the Residence Inn in Madison West, the Courtyard in Madison West, and the Hilton Garden Inn in Rockford;
(ii) 50% of cash dividends (on a per dividend basis) received from Circle 8 on or after June 30, 2024; (iii) 30% of the net proceeds from
any bond offerings the Company conducts, which shall not exceed $9 million in the aggregate; and (iv) 25% of the net proceeds from cash
flows, collections and revenues from loans or other investments made by Ault Lending (including but not limited to sales of loans or investments,
dividends, interest payments and amortization payments), which shall not exceed $5 million in the aggregate. In addition, if the Company
decides to sell certain assets, the Company further agreed to deposit funds into the Segregated Account from the sale of those assets,
including, (i) $15 million from the sale of the Florida Property, (ii) $11 million from the sale of the Aircraft, (iii) $17 million from
the sale of the Michigan Property, (iv) $350 per Miner, subject to a de minimis threshold of $1 million, and (v) $10 million from the
sale of Circle 8.

 Pursuant to the Company's
financial guarantee obligations noted above, the Company recorded a guarantee liability of $38.9 million using the practical expedient
to fair value as set forth in ASC 460-10-30-2(a) and recorded an expense of $35.4 million (the amount of the guarantee liability, less
the $3.5 million restricted cash in the Segregated Account) within other income (expense) on the consolidated statement of operations
and comprehensive loss for the year ended December 31, 2023.

 The guarantee written by the
Company represents a variable interest in Ault & Company. Ault & Company, Inc, founded in 2015, is a private holding company focused
on acquiring undervalued assets and disruptive technologies within the commercial, defense, aerospace, industrial, hospitality, technology
and real estate sectors. Mr. Ault is the Founder and Executive Chairman of its Board of Directors. Ault & Company has demonstrated
its ability to raise capital independently, on a limited basis, however given the nature of its strategic investment policy, there is
no requirement for it to raise additional capital until and unless a strategic opportunity presents itself that requires additional capital.
The nature and amount of the financing that the Company guaranteed indicates that Ault & Company's lender required the Company's
collateral and support to close the December 2023 financing.

 The accounting guidance requires
the Company to perform an analysis to determine whether its variable interest gives it a controlling financial interest in Ault &
Company. The Company performed a VIE analysis and determined that given the control structure and ownership of Ault & Company that
the Company would not be able to remove the key operating decision maker, Mr. Ault, from his leadership role at Ault & Company and
therefore the Company does not meet the power criterion to be considered the primary beneficiary of Ault & Company.

 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 to sell shares of common stock having an aggregate
offering price of up to $ 200 million from time to time, through an "at the market offering" program (the "2022 Common
ATM Offering"). As of December 31, 2022, the Company had sold an aggregate of approximately 38,000 shares of common stock pursuant
to the 2022 Common ATM Offering for gross proceeds of $ 172.4 million.

 F- 49

 Public Offering of Series D Preferred Stock

 The Company has designated
2.0 million shares of preferred stock, par value $ 0.001 per share, of the Company as the Series D Preferred Stock.

 On June 3, 2022, the Company
announced the closing of its public offering of 144,000 shares of its Series D Preferred Stock at a price to the public of $ 25.00 per
share. Gross proceeds from the offering were approximately $ 3.6 million, before deducting offering expenses. Net proceeds to the Company,
after payment of commissions, non-accountable fees and offering expenses were $ 3.1 million.

 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 $ 46.4
 million (the "2022 Preferred ATM Offering"). As of December 31, 2022, the Company had sold an aggregate of 28,838
 shares of Series D Preferred Stock pursuant to the 2022 Preferred ATM Offering for gross proceeds of $ 0.5
 million.

 27.
 INCOME TAXES

 The following is a geographical
breakdown of income/loss before the provision for income tax, for the years ended December 31, 2023 and 2022:

 Schedule of income loss before the provision for income tax

 2023

 2022

 Pre-tax loss

 U.S. Federal

 $
 ( 256,824,000
)

 $
 ( 189,899,000
)

 Foreign

 867,000

 ( 4,419,000

)

 Total

 $
 ( 255,957,000
)

 $
 ( 194,318,000
)

 Deferred income taxes reflect
the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes
and income tax purposes. Significant components of the Company's deferred tax assets are as follows:

 Schedule of deferred tax assets

 2023

 2022

 Deferred tax asset:

 Allowance for doubtful accounts

 $

 315,000

 $

 439,000

 Unrealized losses

 13,859,000

 11,082,000

 Obsolete inventory

 1,996,000

 2,816,000

 Stock compensation

 13,383,000

 3,581,000

 Other carryforwards

 311,000

 317,000

 Net operating loss carryforwards

 94,899,000

 17,878,000

 Lease liability

 1,224,000

 1,979,000

 Impairment

 29,702,000

 22,822,000

 Accrued expenses

 2,360,000

 3,648,000

 14,713,000

 8,668,000

 Outside basis difference

 9,308,000

 -

 Other

 2,095,000

 404,000

 Total deferred tax asset

 184,165,000

 73,634,000

 Deferred tax liability:

 Right-of-use assets

 ( 1,112,000

)

 ( 1,865,000

)

 Fixed assets, net

 ( 15,289,000

)

 ( 1,575,000

)

 Intangible assets, net

 42,000

 ( 6,638,000

)

 Bargain gain/loss

 -

 ( 225,000

)

 Total deferred income tax liabilities

 ( 16,359,000

)

 ( 10,303,000

)

 Net deferred income tax assets

 167,806,000

 63,331,000

 Valuation allowance

 ( 167,806,000

)

 ( 63,304,000

)

 Deferred tax asset (liability), net

 -

 $

 F- 50

 At December 31, 2023,
the Company had federal net operating loss carryforwards ("NOLs") for income tax purposes of approximately $ 215.4
million related to the year after December 31, 2017 that does not have an expiration under current tax law and $ 132.5
million that expire between 2024 and 2037 after application of limitation set forth in Section 382 of the Internal Revenue Code
("§382"). The Company had state NOLs for income tax purposes of approximately $251.6 million as of December 31,
2023. The state NOLs may be used to offset future taxable income and will begin to expire in 2038,
unless previously utilized. In accordance with §382, future utilization of the Company's NOLs is subject to an annual
limitation as a result of ownership changes that occurred previously. The Company also maintains NOLs in various foreign
jurisdictions.

 At December 31, 2023, Ault
Disruptive, an entity not consolidated for income tax purposes, utilized its remaining NOLs. The Company has not completed
a formal §382 study and completion of such an analysis in future periods may yield income tax provision impacts in subsequent financial
statements.

 In assessing the realization of deferred tax assets, management considers
whether it is more likely than not some portion or all deferred tax assets will not be realized. The ultimate realization of deferred
tax assets is dependent upon the generation of future taxable income during the periods in which temporary differences representing net
future deductible amounts become deductible. Management considers the scheduled reversal of deferred tax assets, projected future taxable
income and tax planning strategies in making this assessment. After consideration of all positive and negative evidence, including the
Company's generation of NOLs in current and prior periods, there is substantial doubt regarding the Company's ability to utilize
its deferred tax assets, therefore, the Company recorded a full valuation allowance. For the year ended December 31, 2023, the valuation
allowance increased by $ 104.5 million.

 The net income tax provision (benefit)
consisted of the following:

 Schedule of reconciliation of income tax attributable to operations

 2023

 2022

 Current

 U.S. Federal

 $
 221,000

 $
 244,000

 U.S. State

 ( 99,000
)

 143,000

 Foreign

 188,000

 132,000

 Total current provision

 310,000

 519,000

 Deferred

 U.S. Federal

 ( 4,977,000
)

 U.S. State

 ( 27,000
)

 Foreign

 Total deferred provision (benefit)

 ( 5,004,000
)

 Total provision (benefit) for income taxes

 $
 337,000

 $
 ( 4,485,000
)

 The Company's effective
tax rates were ( 0.3)% and 2.3 % for the years ended December 31, 2023 and 2022, respectively. During the year ended December 31, 2023,
the effective tax rate differed from the U.S. federal statutory rate primarily due to the change in valuation allowance. The reconciliation
of income tax attributable to operations computed at U.S. Federal statutory income tax rates of 21 % to income tax expense is as follows:

 Schedule of effective income tax rate reconciliation

 2023

 2022

 Expected federal income tax benefit

 21.0

 %

 21.0

 %

 State taxes net of federal benefit

 - 1.1

 %

 7.3

 %

 Effect of change in valuation allowance

 - 15.8

 %

 - 22.1

 %

 Permanent differences

 1.0

 %

 - 1.0

 %

 Goodwill impairment

 - 2.3

 %

 - 1.4

 %

 IRC Section 162(m) compensation limitation

 0.0

 %

 - 0.3

 %

 Excess tax benefit - windfall/(shortfall)

 - 0.2

 %

 - 0.2

 %

 Guarantee loss

 - 2.9

 %

 -

 Other

 0.2

 %

 - 0.9

 %

 Income tax benefit

 - 0.1

 %

 2.3

 %

 The Company accounts for uncertain
tax positions in accordance with ASC 740-10-25. ASC 740-10-25 addresses the determination of whether tax benefits claimed or expected
to be claimed on a tax return should be recorded in the financial statements. Under ASC 740-10-25, the Company may recognize the tax benefit
from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing
authorities, based on the technical merits of the position. The tax benefit to be recognized is measured as the largest amount of benefit
that is greater than fifty percent likely of being realized upon ultimate settlement. To the extent that the final tax outcome of these
matters is different than the amount recorded, such differences impact income tax expense in the period in which such determination is
made. Interest and penalties, if any, related to accrued liabilities for potential tax assessments are included in income tax expense.
ASC 740-10-25 also requires management to evaluate tax positions taken by the Company and recognize a liability if the Company has taken
uncertain tax positions that more likely than not would not be sustained upon examination by applicable taxing authorities. Management
of the Company has evaluated tax positions taken by the Company and has concluded that as of December 31, 2023 and 2022, there are no
uncertain tax positions taken, or expected to be taken, that would require recognition of a liability that would require disclosure in
the financial statements.

 F- 51

 In general, the Company's
statute of limitations remains open for various taxable years, in various U.S. federal, U.S. state and foreign jurisdictions. However,
if and when the Company claims net operating loss carryforwards against future taxable income, those losses may be examined by taxing
authorities. The Company will perform an analysis to determine the effect, if any, of these loss limitations rules on the NOL carryforward
balances. Earnings in all foreign jurisdictions are permanently reinvested.

 28. NET LOSS PER SHARE

 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, 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 common stock, consisted of the following at December 31, 2023 and 2022:

 Schedule of net loss per share

 2023

 2022

 Warrants

 14,179,000

 2,000

 Convertible preferred stock

 8,137,000

 -

 Convertible notes

 1,339,000

 -

 Stock options

 1,000

 1,000

 Total

 23,656,000

 3,000

 29. SEGMENT AND CUSTOMERS INFORMATION

 The Company has eight and
seven reportable segments and the holding company as of December 31, 2023 and 2022, respectively; see Note 1 for a brief description of
the Company's business.

 The following data presents
the revenues, expenditures and other operating data of the Company's operating segments and presented in accordance with ASC 280.

 Segment information for the
year ended December 31, 2023:

 Schedule of operating segments

 GIGA

 Turn On
 Green

 Fintech

 Sentinum

 Ault

 Disruptive

 SMC

 Energy

 ROI

 Holding

 Company

 Total

 Revenue, product

 $

 $

 $
 -

 $
 1,416,000

 $
 -

 $

 $
 899,000

 $

 $
 -

 $
 76,137,000

 Revenue, digital currencies mining

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

)

 -

 -

 -

 -

 -

 -

)

 Revenue, crane operations

 -

 -

 -

 -

 -

 -

 -

 -

 Total revenues

 $

 $

 $
)

 $

 $
 -

 $

 $
 50,743,000

 $

 $
 -

 $
 156,444,000

 Depreciation and amortization expense

 $
 1,097,000

 $
 93,000

 $
 -

 $
 18,295,000

 $
 -

 $
 884,000

 $
 4,377,000

 $
 173,000

 $
 2,055,000

 $
 26,974,000

 Impairment of goodwill and intangible assets

 $
 4,681,000

 $
 -

 $
 -

 $
 -

 $
 -

 $
 -

 $
 42,880,000

 $
 -

 $
 -

 $
 47,561,000

 $
 -

 $
 -

 $
 -

 $
 -

 $
 -

 $
 -

 $
 14,025,000

 $
 4,136,000

 $
 -

 $
 18,161,000

 $
 -

 $
 -

 $
 -

 $
 489,000

 $
 -

 $
 -

 $
 -

 $
 -

 $
 -

 $
 489,000

 Income (loss) from operations

 $
 ( 12,227,000
)

 $
 ( 4,381,000
)

 $
 ( 3,416,000
)

 $
 ( 2,583,000
)

 $
 ( 1,325,000
)

 $
 ( 6,972,000
)

 $
 ( 51,351,000
)

 $
 ( 44,353,000
)

 $
 ( 27,113,000
)

 $
 ( 153,721,000
)

 $
 843,000

 $
 124,000

 $
 -

 $
 221,000

 $
 -

 $
 338,000

 $
 2,344,000

 $
 4,383,000

 $
 28,342,000

 $
 36,595,000

 Capital expenditures for the year ended December 31, 2023

 $
 271,000

 $
 145,000

 $
 -

 $
 2,019,000

 $
 -

 $
 383,000

 $
 3,603,000

 $
 479,000

 $
 2,757,000

 $
 9,657,000

 Segment identifiable assets as of December 31, 2023

 $
 32,470,000

 $
 4,995,000

 $
 17,027,000

 $
 59,903,000

 $
 2,347,000

 $
 -

 $
 51,254,000

 $
 9,937,000

 $
 31,266,000

 208,199,000

 Assets of discontinued operations

 90,991,000

 Total identifiable assets as of December 31, 2023

 $
 299,190,000

 F- 52

 Segment information for the
year ended December 31, 2022:

 GIGA

 Turn On
 Green

 Fintech

 Sentinum

 Ault
 Disruptive

 SMC

 Energy

 Holding

 Company

 Total

 Revenue

 $

 $

 $

 $
 1,105,000

 $
 -

 $

 $
 216,000

 $
 -

 $
 61,561,000

 Revenue, digital currencies mining

 -

 -

 -

 -

 -

 -

 -

 Revenue, crane operations

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 Total revenues

 $

 $

 $
 36,883,000

 $

 $
 -

 $

 $

 $
 -

 $
 117,637,000

 Depreciation and amortization expense

 $
 1,713,000

 $
 497,000

 $
 475,000

 $
 12,396,000

 $
 -

 $
 503,000

 $
 281,000

 $
 556,000

 $
 16,421,000

 Impairment of goodwill and intangible assets

 $
 9,881,000

 -

 $
 -

 $
 -

 $
 -

 $
 3,183,000

 $
 -

 $
 -

 $
 13,064,000

 $
 -

 $
 -

 $
 -

 $
 79,556,000

 $
 -

 $
 -

 $
 -

 $
 -

 $
 79,556,000

 Impairment of deposit due to vendor bankruptcy filing

 $
 -

 $
 -

 $
 -

 $
 2,000,000

 $
 -

 $
 -

 $
 -

 $
 -

 $
 2,000,000

 $
 -

 $
 -

 $
 -

 $

 $
 -

 $
 -

 $
 -

 $
 -

 $

 Income (loss) from operations

 $
 ( 13,951,000
)

 $
 ( 3,843,000
)

 $
 4,430,000

 $
 ( 91,614,000
)

 $
 ( 1,420,000
)

 $
 ( 4,973,000
)

 $
 ( 546,000
)

 $
 ( 27,560,000
)

 $
 ( 139,477,000
)

 $
 745,000

 $
 7,000

 $
 3,000

 $
 233,000

 $
 7,000

 $
 271,000

 $
 1,457,000

 $
 34,619,000

 $
 37,342,000

 Capital expenditures for the year ended December 31, 2022

 $
 600,000

 $
 266,000

 $
 17,374,000

 $
 80,799,000

 $
 -

 $
 93,000

 $
 31,000

 $
 142,000

 $
 99,305,000

 Segment identifiable assets as of December 31, 2022

 $
 38,520,000

 $
 6,959,000

 $
 82,944,000

 $
 75,731,000

 $
 118,791,000

 $
 27,508,000

 $
 96,255,000

 $
 16,312,000

 $
 463,020,000

 Assets of discontinued operations

 98,494,000

 Total identifiable assets as of December 31, 2022

 $
 561,514,000

 30. CONCENTRATIONS
OF CREDIT AND REVENUE RISK

 2023 Concentrations
of Credit and Revenue Risk

 Accounts
receivable are concentrated with a certain large customer. At December 31, 2023, one Circle 8 customer in North America accounted for
 11 % of consolidated accounts receivable.

 For the year
ended December 31, 2023, one customer, a mining pool operator in North America, represented 11 % of consolidated revenues.

 2022 Concentrations
of Credit and Revenue Risk

are concentrated with a certain large customer. At December 31, 2022, one SMC customer in North America accounted for 14 % of consolidated
accounts receivable.

 For the year
ended December 31, 2022, one customer, a mining pool operator in North America, represented 14 % of consolidated revenues.

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 31. SUBSEQUENT EVENTS

 2023 Common ATM
Offering

 During the
period between January 1, 2024 through April 16, 2024, the Company sold an aggregate of 25.6 million shares of common stock pursuant to
the 2023 Common ATM Offering for gross proceeds of $ 14.6 million.

 6% Convertible Promissory
Notes

 On March 11,
2024, the Company entered into a note purchase agreement with two institutional investors pursuant to which the Investors agreed to acquire,
and the Company agreed to issue and sell in a registered direct offering to the Investors an aggregate of $ 2.0 million convertible promissory
notes, bearing interest of 6 %. The convertible promissory notes were issued at a discount, with net proceeds to the Company of $ 1.8 million.
The convertible promissory notes are scheduled to mature June 12, 2024, the Company has the option to extend the maturity date to September
12, 2024, for which the Company will increase the principal amount of the Notes by 5%. The Notes are convertible into shares of common
stock at a conversion price of $ 0.35 per share.

 Additional Closings of Series
C Preferred Stock, Related Party

 On each
of March 7, 2024, March 8, 2024, March 18, 2024 and March 19, 2024 pursuant to the November 2023 SPA entered into with Ault &
Company on November 6, 2023, the Company sold to Ault & Company 500 shares of Series C Preferred Stock and Warrants to purchase 147,820
shares of common stock, for a total purchase price of $0.5 million. As of March 19, 2024, Ault & Company has purchased an aggregate
of 43,500 shares of Series C Convertible Preferred Stock and Series C Warrants to purchase an aggregate of 12,860,312 Warrant Shares,
for an aggregate purchase price of $43.5 million. The November 2023 SPA provides that Ault & Company may purchase up to $75.0 million
of Series C Convertible Preferred Stock and Series C Warrants in one or more closings.

 Amendment to the November
2023 SPA and Series C Designation of Preferences, Rights and Limitations

 On March 25, 2024, the November 2023 SPA entered into
with Ault & Company was amended to increase the amount of Series C Preferred Stock and Series C Warrants that may be purchase under
the agreement from $50.0 million to $75.0 million and an extension of the date to closing the final tranche of the financing to June 30,
2024. On April 3, 2024, the Company filed a Certificate of Increase to the Series C Designation of Preferences, Rights and Limitations
to increase the number of authorized shares of Series C Preferred Stock from 50,000 to 75,000.

 Ault Lending Investment in Alzamend Series A Convertible Preferred
Stock and Warrants

 On January 31, 2024, Ault
Lending entered into a securities purchase agreement with Alzamend pursuant to which Alzamend agreed to sell Ault Lending up to 6,000
shares of Alzamend Series A convertible preferred stock and warrants to purchase shares of the Alzamend common stock. The Agreement provides
that Ault Lending may purchase up to $6 million of Alzamend Series A Convertible Preferred Stock in one or more closings.

 On January 31, 2024, Alzamend
sold 1,220 shares of its Series A convertible preferred stock and warrants to purchase 1.2 million shares of its common stock to Ault
Lending, for a total purchase price of $ 1.2 million. On March 26, 2024, Alzamend sold an additional 780 shares of its Series A convertible
preferred stock and warrants to purchase 0.8 million shares of its common stock to Ault Lending, for a total purchase price of $ 0.8 million.

 Amendment to the Loan Agreement

 On April 15,
2024, the Loan Agreement was amended to extend the deadline, from the four-month anniversary to the five-month anniversary of the closing
date of the Loans, by which the Company is required to have the minimum balance in the Segregated Account be not less than $7 million.

 Final Distribution of TurnOnGreen Securities
Announced

 The Company established a
record date of April 15, 2024 for its final distribution of TurnOnGreen securities. Stockholders as of this date are entitled to 0.83 shares
of TurnOnGreen common stock and warrants to purchase 0.83 shares of TurnOnGreen common stock for every share of the Company's common stock they held on the record date. The Company will distribute
 25.0 million TurnOnGreen securities in the final distribution.

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