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DESCRIPTION OF BUSINESS | 12 Months Ended
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Dec. 31, 2021
Accounting Policies [Abstract] |
DESCRIPTION OF BUSINESS | 1. DESCRIPTION OF BUSINESS Ault Alliance, Inc., a Delaware corporation which was then known as BitNile Holdings, Inc. ("BitNile" or the "Company"), which was formerly known as Ault Global Holdings, Inc., was incorporated in September 2017. BitNile is a diversified holding company pursuing growth by acquiring undervalued businesses and disruptive technologies with a global impact. Through its wholly- and majority-owned subsidiaries and strategic investments, the Company owns and operates a data center at which it mines Bitcoin, and provides mission-critical products that support a diverse range of industries, including defense/aerospace, industrial, automotive, telecommunications, medical/biopharma, and textiles. In addition, the Company extends credit to select entrepreneurial businesses through a licensed lending subsidiary. BitNile was founded by Milton "Todd" Ault, III, its Executive Chairman and is led by Mr. Ault, William B. Horne, its Chief Executive Officer and Vice Chairman and Henry Nisser, its President and General Counsel. Together, they constitute the Executive Committee, which manages the day-to-day operations of the Company. The Company's long-term objective is to maximize per share intrinsic value. All major investment and capital allocation decisions are made for the Company by Mr. Ault and the Executive Committee. The Company has six reportable segments:
| ● | BitNile, Inc. – cryptocurrency mining operations,
| ● | Ault Alliance, Inc. (“Ault Alliance”) – commercial lending, activist investing, media, and digital learning,
| ● | Gresham Worldwide, Inc. (“GWW”) – defense solutions,
| ● | TurnOnGreen, Inc. (“TurnOnGreen”) – commercial electronics solutions,
| ● | Real Estate – hotel operations and other commercial real estate holdings, and
| ● | Ault Disruptive Technologies Corporation (“Ault Disruptive”) – a special purpose acquisition company (“SPAC”).
On December 13, 2021, the Company changed its name from Ault Global Holdings, Inc. to BitNile Holdings, Inc. The name change did not affect the rights of security holders of the Company. The common stock continues to be listed on the NYSE American and trades under the symbol “NILE”. 1 A. RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS This Amendment amends the Annual Report on Form 10-K of the Company for the year ended December 31, 2021, that was originally filed with the U.S. Securities and Exchange Commission on April 15, 2022. This Amendment only corrects an error in classification with respect to changes in fair value of financial instruments issued by a related party. The changes in fair value were erroneously recorded in other comprehensive income (loss) and have been reclassified to correct for the error within the statement of operations. The Company has restated its Consolidated Balance Sheets, Consolidated Statements of Operations and Comprehensive Loss, Consolidated Statements of Changes in Stockholders’ Equity and Condensed Consolidated Statements of Cash Flows to correct this misclassification. Finally, the Company has modified its disclosures in Item 9A of Part II to reflect the identification of an additional material weakness. As a result, the reclassification resulted in an increase to “Accumulated deficit” and a corresponding decrease to “Accumulated other comprehensive loss” within stockholders’ equity, as reflected in the Company’s Consolidated Balance Sheets pursuant to the schedule below:
Schedule of consolidated statements balance sheet |  |  |  |  |  |  |  |  |  |  |  |
|  | For the Year Ended |
|  | December 31, 2020 |
|  | As Reported |  |  | Adjustment |  |  | As Restated |
STOCKHOLDERS’ EQUITY |  |  |  |  |  |  |  |  |  |  |  |
Series A Convertible Preferred Stock, $25.00 stated value per share, |  | $ | - |  |  | $ | - |  |  | $ | - |
$0.001 par value – 1,000,000 shares authorized; 7,040 shares |  |  |  |  |  |  |  |  |  |  |  |
issued and outstanding at December 31, 2021 and 2020 |  |  |  |  |  |  |  |  |  |  |  |
(redemption amount and liquidation preference of $176,000 as of |  |  |  |  |  |  |  |  |  |  |  |
December 31, 2021 and 2020) |  |  |  |  |  |  |  |  |  |  |  |
Series B Convertible Preferred Stock, $10 stated value per share, |  |  | - |  |  |  |  |  |  |  | - |
share, $0.001 par value – 500,000 shares authorized; 125,000 shares issued |  |  |  |  |  |  |  |  |  |  |  |
and outstanding at December 31, 2021 and 2020 (liquidation |  |  |  |  |  |  |  |  |  |  |  |
preference of $1,250,000 at December 31, 2021 and 2020) |  |  |  |  |  |  |  |  |  |  |  |
Class A Common Stock, $0.001 par value – 500,000,000 shares authorized; |  |  | 28,000 |  |  |  |  |  |  |  | 28,000 |
84,344,607 and 27,753,562 shares issued and outstanding at December 31, |  |  |  |  |  |  |  |  |  |  |  |
2021 and 2020, respectively |  |  |  |  |  |  |  |  |  |  |  |
Class B Common Stock, $0.001 par value – 25,000,000 shares authorized; |  |  | - |  |  |  |  |  |  |  | - |
nil shares issued and outstanding at December 31, 2021 and 2020 |  |  |  |  |  |  |  |  |  |  |  |
Additional paid-in capital |  |  | 171,396,000 |  |  |  |  |  |  |  | 171,396,000 |
Accumulated deficit |  |  | (121,396,000 | ) |  |  | (933,000 | ) |  |  | (122,329,000 | )
Accumulated other comprehensive loss |  |  | (1,718,000 | ) |  |  | 933,000 |  |  |  | (785,000 | )
Treasury stock, at cost |  |  | - |  |  |  | - |  |  |  | - |
TOTAL BITNILE HOLDINGS STOCKHOLDERS’ EQUITY |  |  | 48,310,000 |  |  |  | - |  |  |  | 48,310,000 |
Non-controlling interest |  |  | 822,000 |  |  |  |  |  |  |  | 822,000 |
TOTAL STOCKHOLDERS’ EQUITY |  | $ | 49,132,000 |  |  | $ | - |  |  | $ | 49,132,000 |
The Consolidated Statements of Operations and Comprehensive Loss amounts were adjusted pursuant to the schedules below:
Schedule of consolidated statements of operations and comprehensive loss |  |  |  |  |  |  |  |  |  |  |  |
|  | For the Year Ended |
|  | December 31, 2020 |
|  | As Reported |  |  | Adjustment |  |  | As Restated |
Revenue |  | $ | 23,629,000 |  |  | $ | - |  |  | $ | 23,629,000 |
Revenue, lending and trading activities |  |  | 242,000 |  |  |  |  |  |  |  | 242,000 |
Total revenue |  |  | 23,871,000 |  |  |  | - |  |  |  | 23,871,000 |
Cost of revenue |  |  | 16,357,000 |  |  |  |  |  |  |  | 16,357,000 |
Gross profit |  |  | 7,514,000 |  |  |  | - |  |  |  | 7,514,000 |
Operating expenses |  |  |  |  |  |  |  |  |  |  |  |
Research and development |  |  | 1,849,000 |  |  |  |  |  |  |  | 1,849,000 |
Selling and marketing |  |  | 1,177,000 |  |  |  |  |  |  |  | 1,177,000 |
General and administrative |  |  | 12,521,000 |  |  |  |  |  |  |  | 12,521,000 |
Benefit for credit losses |  |  | (2,000,000 | ) |  |  |  |  |  |  | (2,000,000 | )
Total operating expenses |  |  | 13,547,000 |  |  |  | - |  |  |  | 13,547,000 |
Loss from continuing operations |  |  | (6,033,000 | ) |  |  |  |  |  |  | (6,033,000 | )
Other income (expenses) |  |  |  |  |  |  |  |  |  |  |  |
Interest and other income |  |  | 105,000 |  |  |  |  |  |  |  | 105,000 |
Change in fair value of equity securities, related party |  |  | - |  |  |  | 3,312,000 |  |  |  | 3,312,000 |
Interest expense |  |  | (9,648,000 | ) |  |  |  |  |  |  | (9,648,000 | )
Change in fair value of marketable equity securities |  |  | 919,000 |  |  |  |  |  |  |  | 919,000 |
Gain (loss) on extinguishment of debt |  |  | (18,706,000 | ) |  |  |  |  |  |  | (18,706,000 | )
Change in fair value of warrant liability |  |  | (49,000 | ) |  |  |  |  |  |  | (49,000 | )
Total other income (expenses), net |  |  | (27,379,000 | ) |  |  | 3,312,000 |  |  |  | (24,067,000 | )
Loss from continuing operations before income taxes |  |  | (33,412,000 | ) |  |  | 3,312,000 |  |  |  | (30,100,000 | )
Income tax (provision) benefit |  |  | 24,000 |  |  |  |  |  |  |  | 24,000 |
Net loss from continuing operations |  |  | (33,388,000 | ) |  |  | 3,312,000 |  |  |  | (30,076,000 | )
Net income from discontinued operations, net of taxes |  |  | 661,000 |  |  |  |  |  |  |  | 661,000 |
Net loss |  |  | (32,727,000 | ) |  |  | 3,312,000 |  |  |  | (29,415,000 | )
Net loss attributable to non-controlling interest |  |  | - |  |  |  |  |  |  |  | - |
Net loss attributable to Ault Alliance |  |  | (32,727,000 | ) |  |  | 3,312,000 |  |  |  | (29,415,000 | )
Preferred dividends |  |  | (18,000 | ) |  |  |  |  |  |  | (18,000 | )
Net loss available to common stockholders |  | $ | (32,745,000 | ) |  | $ | 3,312,000 |  |  | $ | (29,433,000 | )
Basic and diluted net loss per common share: |  |  |  |  |  |  |  |  |  |  |  |
Continuing operations |  | $ | (3.48 | ) |  |  |  |  |  | $ | (3.13 | )
Discontinued operations |  |  | 0.07 |  |  |  |  |  |  |  | 0.07 |
Net loss per common share |  | $ | (3.41 | ) |  |  |  |  |  | $ | (3.06 | )
Weighted average common shares outstanding, basic and diluted |  |  | 9,606,000 |  |  |  |  |  |  |  | 9,606,000 |
Comprehensive loss |  |  |  |  |  |  |  |  |  |  |  |
Net loss available to common stockholders |  | $ | (32,745,000 | ) |  | $ | 3,312,000 |  |  | $ | (29,433,000 | )
Other comprehensive income |  |  |  |  |  |  |  |  |  |  |  |
Foreign currency translation adjustment |  |  | 482,000 |  |  |  | - |  |  |  | 482,000 |
Net unrealized gain (loss) on derivative securities of related party |  |  | 3,312,000 |  |  |  | (3,312,000 | ) |  |  | - |
Other comprehensive income |  |  | 3,794,000 |  |  |  | (3,312,000 | ) |  |  | 482,000 |
Total comprehensive loss |  | $ | (28,951,000 | ) |  | $ | - |  |  | $ | (28,951,000 | )
|  | For the Year Ended |
|  | December 31, 2021 |
|  | As Reported |  |  | Adjustment |  |  | As Restated |
Revenue |  | $ | 32,096,000 |  |  | $ | - |  |  | $ | 32,096,000 |
Revenue, cryptocurrency mining, net |  |  | 3,450,000 |  |  |  |  |  |  |  | 3,450,000 |
Revenue, lending and trading activities |  |  | 16,854,000 |  |  |  |  |  |  |  | 16,854,000 |
Total revenue |  |  | 52,400,000 |  |  |  | - |  |  |  | 52,400,000 |
Cost of revenue |  |  | 23,858,000 |  |  |  |  |  |  |  | 23,858,000 |
Gross profit |  |  | 28,542,000 |  |  |  | - |  |  |  | 28,542,000 |
Operating expenses |  |  |  |  |  |  |  |  |  |  |  |
Research and development |  |  | 2,041,000 |  |  |  |  |  |  |  | 2,041,000 |
Selling and marketing |  |  | 7,773,000 |  |  |  |  |  |  |  | 7,773,000 |
General and administrative |  |  | 36,686,000 |  |  |  |  |  |  |  | 36,686,000 |
Impairment of mined cryptocurrency |  |  | 403,000 |  |  |  |  |  |  |  | 403,000 |
Total operating expenses |  |  | 46,903,000 |  |  |  | - |  |  |  | 46,903,000 |
Loss from continuing operations |  |  | (18,361,000 | ) |  |  |  |  |  |  | (18,361,000 | )
Other income (expenses) |  |  |  |  |  |  |  |  |  |  |  |
Interest and other income |  |  | 808,000 |  |  |  |  |  |  |  | 808,000 |
Change in fair value of equity securities, related party |  |  | - |  |  |  | (7,773,000 | ) |  |  | (7,773,000 | )
Accretion of discount on note receivable, related party |  |  | - |  |  |  | 4,210,000 |  |  |  | 4,210,000 |
Impairment of debt securities, net |  |  | (5,090,000 | ) |  |  | 4,496,000 |  |  |  | (594,000 | )
Interest expense |  |  | (1,871,000 | ) |  |  |  |  |  |  | (1,871,000 | )
Change in fair value of marketable equity securities |  |  | (1,327,000 | ) |  |  |  |  |  |  | (1,327,000 | )
Realized gain on marketable securities |  |  | 1,924,000 |  |  |  |  |  |  |  | 1,924,000 |
Loss from equity investment |  |  | (311,000 | ) |  |  |  |  |  |  | (311,000 | )
Gain (loss) on extinguishment of debt |  |  | 929,000 |  |  |  |  |  |  |  | 929,000 |
Change in fair value of warrant liability |  |  | (542,000 | ) |  |  |  |  |  |  | (542,000 | )
Total other income (expenses), net |  |  | (5,480,000 | ) |  |  | 933,000 |  |  |  | (4,547,000 | )
Loss from continuing operations before income taxes |  |  | (23,841,000 | ) |  |  | 933,000 |  |  |  | (22,908,000 | )
Income tax (provision) benefit |  |  | (130,000 | ) |  |  |  |  |  |  | (130,000 | )
Net loss from continuing operations |  |  | (23,971,000 | ) |  |  | 933,000 |  |  |  | (23,038,000 | )
Net income from discontinued operations, net of taxes |  |  | - |  |  |  |  |  |  |  | - |
Net loss |  |  | (23,971,000 | ) |  |  | 933,000 |  |  |  | (23,038,000 | )
Net loss attributable to non-controlling interest |  |  | (213,000 | ) |  |  |  |  |  |  | (213,000 | )
Net loss attributable to Ault Alliance |  |  | (24,184,000 | ) |  |  | 933,000 |  |  |  | (23,251,000 | )
Preferred dividends |  |  | (18,000 | ) |  |  |  |  |  |  | (18,000 | )
Net loss available to common stockholders |  | $ | (24,202,000 | ) |  | $ | 933,000 |  |  | $ | (23,269,000 | )
Basic and diluted net loss per common share: |  |  |  |  |  |  |  |  |  |  |  |
Continuing operations |  | $ | (0.44 | ) |  |  |  |  |  | $ | (0.42 | )
Discontinued operations |  |  | 0.00 |  |  |  |  |  |  |  | 0.00 |
Net loss per common share |  | $ | (0.44 | ) |  |  |  |  |  | $ | (0.42 | )
Weighted average common shares outstanding, basic and diluted |  |  | 55,444,000 |  |  |  |  |  |  |  | 55,444,000 |
Comprehensive loss |  |  |  |  |  |  |  |  |  |  |  |
Net loss available to common stockholders |  | $ | (24,202,000 | ) |  | $ | 933,000 |  |  | $ | (23,269,000 | )
Other comprehensive income |  |  |  |  |  |  |  |  |  |  |  |
Foreign currency translation adjustment |  |  | 85,000 |  |  |  | - |  |  |  | 85,000 |
Net unrealized gain (loss) on derivative securities of related party |  |  | (7,773,000 | ) |  |  | 7,773,000 |  |  |  | - |
Impairment of debt securities |  |  | 9,300,000 |  |  |  | (8,706,000 | ) |  |  | 594,000 |
Other comprehensive income |  |  | 1,612,000 |  |  |  | (933,000 | ) |  |  | 679,000 |
Total comprehensive loss |  | $ | (22,590,000 | ) |  | $ | - |  |  | $ | (22,590,000 | )
The Condensed Consolidated Statements of Changes in Stockholders’ Equity amounts of “Accumulated deficit” and “Accumulated other comprehensive loss” were adjusted pursuant to the schedules below:
Schedule of condensed consolidated statements of changes in stockholders’ equity |  |  |  |  |  |  |  |  |  |  |  |
|  | January 1, 2020 |
|  | As Reported |  |  | Adjustment |  |  | As Restated |
STOCKHOLDERS’ EQUITY |  |  |  |  |  |  |  |  |  |  |  |
Common stock |  | $ | 3,000 |  |  | $ | - |  |  | $ | 3,000 |
Additional paid-in capital |  |  | 101,099,000 |  |  |  |  |  |  |  | 101,099,000 |
Accumulated deficit |  |  | (88,650,000 | ) |  |  | (4,245,000 | ) |  |  | (92,895,000 | )
Accumulated other comprehensive loss |  |  | (5,511,000 | ) |  |  | 4,245,000 |  |  |  | (1,266,000 | )
TOTAL AULT ALLIANCE STOCKHOLDERS’ EQUITY |  |  | 6,941,000 |  |  |  | - |  |  |  | 6,941,000 |
Non-controlling interest |  |  | 8,000 |  |  |  |  |  |  |  | 8,000 |
TOTAL STOCKHOLDERS’ EQUITY |  | $ | 6,949,000 |  |  | $ | - |  |  | $ | 6,949,000 |
|  | December 31, 2020 |
|  | As Reported |  |  | Adjustment |  |  | As Restated |
STOCKHOLDERS’ EQUITY |  |  |  |  |  |  |  |  |  |  |  |
Common stock |  | $ | 28,000 |  |  | $ | - |  |  | $ | 28,000 |
Additional paid-in capital |  |  | 171,396,000 |  |  |  |  |  |  |  | 171,396,000 |
Accumulated deficit |  |  | (121,396,000 | ) |  |  | (933,000 | ) |  |  | (122,329,000 | )
Accumulated other comprehensive loss |  |  | (1,718,000 | ) |  |  | 933,000 |  |  |  | (785,000 | )
TOTAL AULT ALLIANCE STOCKHOLDERS’ EQUITY |  |  | 48,310,000 |  |  |  | - |  |  |  | 48,310,000 |
Non-controlling interest |  |  | 822,000 |  |  |  |  |  |  |  | 822,000 |
TOTAL STOCKHOLDERS’ EQUITY |  | $ | 49,132,000 |  |  | $ | - |  |  | $ | 49,132,000 |
Further, the reclassification also resulted in adjustments within net cash used in operating activities, as reflected in the Company’s Consolidated Statements of Cash Flows, as follows:
Schedule of consolidated statements of cash flows |  |  |  |  |  |  |  |  |  |  |  |
|  | For the Year Ended |
|  | December 31, 2020 |
|  | As Reported |  |  | Adjustment |  |  | As Restated |
Cash flows from operating activities: |  |  |  |  |  |  |  |  |  |  |  |
Net loss |  | $ | (32,727,000 | ) |  | $ | 3,312,000 |  |  | $ | (29,415,000 | )
Less: Net income from discontinued operations |  |  | 661,000 |  |  |  |  |  |  |  | 661,000 |
Net loss from continuing operations |  |  | (33,388,000 | ) |  |  | 3,312,000 |  |  |  | (30,076,000 | )
Adjustments to reconcile net loss to net cash used in operating activities: |  |  |  |  |  |  |  |  |  |  |  |
Depreciation |  |  | 392,000 |  |  |  |  |  |  |  | 392,000 |
Amortization |  |  | 336,000 |  |  |  |  |  |  |  | 336,000 |
Amortization of right-of-use assets |  |  | (140,000 | ) |  |  |  |  |  |  | (140,000 | )
Interest expense – debt discount |  |  | 7,251,000 |  |  |  |  |  |  |  | 7,251,000 |
Loss on extinguishment of debt |  |  | 18,706,000 |  |  |  |  |  |  |  | 18,706,000 |
Change in fair value of warrant liability |  |  | 49,000 |  |  |  |  |  |  |  | 49,000 |
Accretion of original issue discount on notes receivable – related party |  |  | 22,000 |  |  |  |  |  |  |  | 22,000 |
Accretion of original issue discount on notes receivable |  |  | (62,000 | ) |  |  |  |  |  |  | (62,000 | )
Increase in accrued interest on notes receivable – related party |  |  | (1,000 | ) |  |  |  |  |  |  | (1,000 | )
Stock-based compensation |  |  | 1,106,000 |  |  |  |  |  |  |  | 1,106,000 |
Impairment of cryptocurrencies |  |  | (5,000 | ) |  |  |  |  |  |  | (5,000 | )
Realized losses on other investments |  |  | 39,000 |  |  |  |  |  |  |  | 39,000 |
Realized gains on sale of marketable securities |  |  | (75,000 | ) |  |  |  |  |  |  | (75,000 | )
Unrealized gains on marketable equity securities |  |  | (796,000 | ) |  |  |  |  |  |  | (796,000 | )
Unrealized gains on equity securities – related party |  |  | (298,000 | ) |  |  | (3,312,000 | ) |  |  | (3,610,000 | )
Unrealized losses on equity securities |  |  | 73,000 |  |  |  |  |  |  |  | 73,000 |
Provision for loan losses |  |  | (2,000,000 | ) |  |  |  |  |  |  | (2,000,000 | )
Changes in operating assets and liabilities: |  |  |  |  |  |  |  |  |  |  |  |
Accounts receivable |  |  | (641,000 | ) |  |  |  |  |  |  | (641,000 | )
Accrued revenue |  |  | 645,000 |  |  |  |  |  |  |  | 645,000 |
Inventories |  |  | 183,000 |  |  |  |  |  |  |  | 183,000 |
Prepaid expenses and other current assets |  |  | (1,613,000 | ) |  |  |  |  |  |  | (1,613,000 | )
Other assets |  |  | (88,000 | ) |  |  |  |  |  |  | (88,000 | )
Accounts payable and accrued expenses |  |  | (364,000 | ) |  |  |  |  |  |  | (364,000 | )
Accounts payable, related parties |  |  | (28,000 | ) |  |  |  |  |  |  | (28,000 | )
Other current liabilities |  |  | (650,000 | ) |  |  |  |  |  |  | (650,000 | )
Lease liabilities |  |  | 168,000 |  |  |  |  |  |  |  | 168,000 |
Net cash used in continuing operating activities |  |  | (11,179,000 | ) |  |  | - |  |  |  | (11,179,000 | )
Net cash provided by discontinued operating activities |  |  | 1,000 |  |  |  | - |  |  |  | 1,000 |
Net cash used in operating activities |  | $ | (11,178,000 | ) |  | $ | - |  |  | $ | (11,178,000 | )
|  | For the Year Ended |
|  | December 31, 2021 |
|  | As Reported |  |  | Adjustment |  |  | As Restated |
Cash flows from operating activities: |  |  |  |  |  |  |  |  |  |  |  |
Net loss |  | $ | (23,971,000 | ) |  | $ | 933,000 |  |  | $ | (23,038,000 | )
Adjustments to reconcile net loss to net cash used in operating activities: |  |  |  |  |  |  |  |  |  |  |  |
Depreciation |  |  | 2,103,000 |  |  |  |  |  |  |  | 2,103,000 |
Amortization |  |  | 375,000 |  |  |  |  |  |  |  | 375,000 |
Amortization of right-of-use assets |  |  | 950,000 |  |  |  |  |  |  |  | 950,000 |
Amortization, related party |  |  | 30,000 |  |  |  |  |  |  |  | 30,000 |
Interest expense – debt discount |  |  | 1,076,000 |  |  |  |  |  |  |  | 1,076,000 |
Gain on extinguishment of debt |  |  | (929,000 | ) |  |  |  |  |  |  | (929,000 | )
Change in fair value of warrant liability |  |  | 542,000 |  |  |  |  |  |  |  | 542,000 |
Accretion of original issue discount on notes receivable – related party |  |  | - |  |  |  | (4,210,000 | ) |  |  | (4,210,000 | )
Impairment of debt securities |  |  | 5,090,000 |  |  |  | (4,496,000 | ) |  |  | 594,000 |
Accretion of original issue discount on notes receivable |  |  | 21,000 |  |  |  |  |  |  |  | 21,000 |
Increase in accrued interest on notes receivable – related party |  |  | (235,000 | ) |  |  |  |  |  |  | (235,000 | )
Stock-based compensation |  |  | 7,750,000 |  |  |  |  |  |  |  | 7,750,000 |
Impairment of cryptocurrencies |  |  | 403,000 |  |  |  |  |  |  |  | 403,000 |
Realized gains on sale of marketable securities |  |  | (21,187,000 | ) |  |  |  |  |  |  | (21,187,000 | )
Unrealized losses on marketable equity securities |  |  | 14,127,000 |  |  |  |  |  |  |  | 14,127,000 |
Unrealized losses on equity securities – related party |  |  | 5,754,000 |  |  |  | 7,773,000 |  |  |  | 13,527,000 |
Unrealized gains on equity securities |  |  | (10,734,000 | ) |  |  |  |  |  |  | (10,734,000 | )
Loss from equity investment |  |  | 311,000 |  |  |  |  |  |  |  | 311,000 |
Changes in operating assets and liabilities: |  |  |  |  |  |  |  |  |  |  |  |
Marketable equity securities |  |  | (29,398,000 | ) |  |  |  |  |  |  | (29,398,000 | )
Accounts receivable |  |  | (1,407,000 | ) |  |  |  |  |  |  | (1,407,000 | )
Accrued revenue |  |  | (498,000 | ) |  |  |  |  |  |  | (498,000 | )
Inventories |  |  | (2,031,000 | ) |  |  |  |  |  |  | (2,031,000 | )
Prepaid expenses and other current assets |  |  | (5,548,000 | ) |  |  |  |  |  |  | (5,548,000 | )
Digital currencies |  |  | (3,450,000 | ) |  |  |  |  |  |  | (3,450,000 | )
Other assets |  |  | (1,526,000 | ) |  |  |  |  |  |  | (1,526,000 | )
Accounts payable and accrued expenses |  |  | 1,613,000 |  |  |  |  |  |  |  | 1,613,000 |
Accounts payable, related parties |  |  | 17,000 |  |  |  |  |  |  |  | 17,000 |
Lease liabilities |  |  | (919,000 | ) |  |  |  |  |  |  | (919,000 | )
Net cash used in operating activities |  | $ | (61,671,000 | ) |  | $ | - |  |  | $ | (61,671,000 | )

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