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SUBSEQUENT EVENTS
 12 Months Ended
Dec. 31, 2020
Subsequent Events [Abstract]  
SUBSEQUENT EVENTS

28. SUBSEQUENT EVENTS

 

In accordance with FASB ASC 855-10, the Company has analyzed its operations subsequent to December 31, 2020, and thru the date of this report being issued and has determined that it does not have any material subsequent events to disclose in these financial statements except for the following.

 

2021 ATM Offering

 

On January 22, 2021, the Company entered into an At-The-Market Issuance Sales Agreement, as amended on February 17, 2021 and thereafter on March 5, 2021 (the “2021 Sales Agreement”) with Ascendiant Capital Markets, LLC, or the sales agent, relating to the sale of shares of Common Stock offered by a prospectus supplement and the accompanying prospectus, as amended by the amendments to the sales agreement dated February 16, 2021 and March 5, 2021. In accordance with the terms of the 2021 Sales Agreement, the Company may offer and sell shares of Common Stock having an aggregate offering price of up to $200,000,000 from time to time through the sales agent. As of March 5, 2021, the Company had sold an aggregate of 21,561,900 shares of Common Stock pursuant to the sales agreement for gross proceeds of $124,983,305.

 

Issuance of common stock for conversion of debt

 

During January 2021, principal and accrued interest of $200,000 and $15,948, respectively, on the Company’s debt securities was satisfied through the issuance of 183,214 shares of Common Stock. The Company recognized a loss on extinguishment of $551,718 as a result of this issuance.

 

Acquisition of Michigan Cloud Data Center

 

On January 29, 2021, Alliance Cloud Services, LLC, a majority-owned subsidiary of its wholly-owned subsidiary, Ault Alliance, closed on the acquisition of a 617,000 square foot energy-efficient facility located on a 34.5 acre site in southern Michigan for a purchase price of $3,991,497. The purchase price was paid by the Company using its own working capital. The facility is subject to a final corrective measures plan with the Environment Protection Agency. The seller performed remedial activities at the Michigan facility relating to historical soil and groundwater contamination and the Company is responsible for ongoing monitoring and final remediation plans. The Company’s estimated cost of the environmental remediation obligation is approximately $300,000 and reflects its best estimate of probable future costs for remediation based on the current assessment data and regulatory obligations. Future costs will depend on many factors, including the extent of work necessary to implement monitoring and final remediation plans and the Company’s time frame for remediation. The Company may incur actual costs in the future that are materially different than this estimate and such costs could have a material impact on results of operations, financial condition, and cash flows during the period in which they are recorded.

 

Investment in Alzamend Neuro, Inc.

 

On March 12, 2021, the Company announced that its wholly owned subsidiary, DP Lending, entered into a securities purchase agreement with Alzamend, a related party, to invest $10,000,000 in Alzamend common stock and warrants, subject to the achievement of certain milestones. The Company agreed to fund $4,000,000 upon execution of the securities purchase agreement, consisting of approximately $3,200,000 in cash and the conversion of short term advances and a convertible promissory note in the aggregate amount of $800,000, and to fund the balance upon Alzamend achieving certain milestones related to the U.S. Food and Drug Administration approval of Alzamend’s Investigational New Drug application and Phase 1a human clinical trials for Alzamend’s lithium based ionic cocrystal therapy, known as AL001. Under the securities purchase agreement, Alzamend has agreed to sell up to 6,666,667 shares of its common stock to DP Lending for $10,000,000, or $1.50 per share, and issue to DP Lending warrants to acquire up to 3,333,334 shares of Alzamend common stock with an exercise price of $3.00 per share. The transaction was approved by the Company’s independent directors after receiving a third-party valuation report of Alzamend.

 

Investment in Ault & Company, Inc.

 

On February 25, 2021, Ault & Company, a related party, sold and issued an 8% Secured Promissory Note in the principal amount of $2,500,000 to the Company. The principal amount of the Secured Promissory Note, plus any accrued and unpaid interest at a rate of 8% per annum, is due and payable on February 25, 2022.

 

Executive Chairman relocation benefit

 

On February 23, 2021, as part of a relocation benefit for our Executive Chairman, Milton C. Ault, III, related to the Company moving its corporate headquarters from Newport Beach, CA to Las Vegas, NV, the Company agreed to purchase Mr. Ault’s California residence for $2,670,000. The transaction was structured such that upon the closing of the subsequent sale of the residence, the Company shall have not recognized a gain or a loss on the transaction. The Company and Mr. Ault agreed to escrow $254,200 of the purchase price in the event of a loss on the subsequent sale of the residence. The Company has entered into an agreement for the subsequent sale of the residence, which is currently in escrow.

 

Extension of AVLP Loan Agreement

 

On April 13, 2021, the AVLP Loan Agreement was increased to up to $15,000,000 and extended to December 31, 2023. As of April 14, 2021, the Company has provided loans to AVLP in the principal amount $13,924,136 and, in addition to the 12% convertible promissory notes, AVLP has issued to the Company warrants to purchase 27,848,272 shares of AVLP common stock at an exercise price of $0.50 per share for a period of five years.

 

Forgiveness of Debt

 

On January 11, 2021, the Company received forgiveness of a loan under the PPP in the principal amount of $715,101.

 

Ikonics Corporation

 

  1. Ault Global filed a Schedule 13D with the Commission on January 14, 2021 disclosing that Ault Global had, through its subsidiary DP Lending, purchased 140,719 shares (the “IKNX Shares”), or approximately 7.12% of all issued and outstanding IKNX Shares, of common stock of Ikonics Corporation (“IKNX”) at a weighted average price (“WAP”) per share of $8.48.
  2. Ault Global filed a Schedule 13D/A with the Commission on January 27, 2021, disclosing that Ault Global had increased its position to 166,182 IKNX Shares, or approximately 8.41% of all issued and outstanding IKNX Shares at a WAP per share of $10.30.
  3. Ault Global filed a Schedule 13D/A with the Commission on January 28, 2021, disclosing that Ault Global had increased its position to 197,634 IKNX Shares, or approximately 9.99% of all issued and outstanding IKNX Shares at a WAP per share of $9.72.

 

SilverSun Technologies, Inc.

 

  1. Ault Global filed a Schedule 13D with the Commission on February 1, 2021 disclosing that Ault Global had, through DP Lending, purchased 436,255 shares (the “SSNT Shares”), or approximately 9.69% of all issued and outstanding SSNT Shares, of common stock of SilverSun Technologies, Inc. (“SSNT) at a WAP per share of $4.33. In addition, the Schedule 13D disclosed that Milton C. Ault had purchased 10,000 SSNT Shares at a WAP per share of $3.57.
  2. Ault Global filed a Schedule 13D/A with the Commission on March 1, 2021, disclosing that Ault Global had decreased its position to 397,937 SSNT Shares, or approximately 8.84% of all issued and outstanding SSNT Shares at a WAP per share of $9.28.
  3. Ault Global filed a Schedule 13D/A with the Commission on March 4, 2021, disclosing that Ault Global had decreased its position to 387,426 SSNT Shares, or approximately 8.61% of all issued and outstanding SSNT Shares at a WAP per share of $7.24.
  4. Ault Global filed a Schedule 13D/A with the Commission on March 18, 2021, disclosing that Ault Global had decreased its position to 276,774 SSNT Shares, or approximately 6.15% of all issued and outstanding SSNT Shares at a WAP per share of $7.48.
  5. Ault Global filed a Schedule 13D/A with the Commission on March 26, 2021, disclosing that Ault Global had decreased its position to 75,000 SSNT Shares, or approximately 1.67% of all issued and outstanding SSNT Shares at a WAP per share of $7.11.
  6. Ault Global filed a Schedule 13D with the Commission on April 5, 2021, disclosing that Ault Global had increased its position to 305,500 SSNT Shares, or approximately 6.04% of all issued and outstanding SSNT Shares at a WAP per share of $6.14. Further, the Schedule 13D disclosed that Mr. Ault had decreased his position to 8,800 SSNT Shares.

 

Naked Brand Group, Ltd.

 

  1. Ault Global filed a Schedule 13D with the Commission on April 8, 2021 disclosing that Ault Global had, through DP Lending, acquired 41,141,660 ordinary shares (the “NAKD Shares”), or approximately 6.41% of all issued and outstanding NAKD Shares, of Naked Brand Group Limited (“NAKD”).