<SEC-DOCUMENT>0001214659-23-012430.txt : 20240729
<SEC-HEADER>0001214659-23-012430.hdr.sgml : 20240729
<ACCEPTANCE-DATETIME>20230918154058
<PRIVATE-TO-PUBLIC>
ACCESSION NUMBER:		0001214659-23-012430
CONFORMED SUBMISSION TYPE:	CORRESP
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20230918

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			Ault Alliance, Inc.
		CENTRAL INDEX KEY:			0000896493
		STANDARD INDUSTRIAL CLASSIFICATION:	ELECTRONIC COMPONENTS, NEC [3679]
		ORGANIZATION NAME:           	04 Manufacturing
		IRS NUMBER:				941721931
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		CORRESP

	BUSINESS ADDRESS:	
		STREET 1:		11411 SOUTHERN HIGHLANDS PARKWAY
		STREET 2:		SUITE 240
		CITY:			LAS VEGAS
		STATE:			NV
		ZIP:			89141
		BUSINESS PHONE:		(949) 444-5464 3679

	MAIL ADDRESS:	
		STREET 1:		11411 SOUTHERN HIGHLANDS PARKWAY
		STREET 2:		SUITE 240
		CITY:			LAS VEGAS
		STATE:			NV
		ZIP:			89141

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	BitNile Holdings, Inc.
		DATE OF NAME CHANGE:	20211213

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	Ault Global Holdings, Inc.
		DATE OF NAME CHANGE:	20210119

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	DPW Holdings, Inc.
		DATE OF NAME CHANGE:	20171229
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<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="margin: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>AULT ALLIANCE, INC.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">11411 Southern Highlands Parkway, Suite 240</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Las Vegas, NV 89141</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right">September 18, 2023</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Securities and Exchange Commission</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Division of Corporate Finance</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Office of Manufacturing 100 F Street, NE</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Washington, DC 20549</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Attn.: Kevin Woody and Andrew Blume</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 31.5pt"><B>Re:</B></TD><TD><B>Ault Alliance, Inc.<BR>
Form 10-K/A for the Fiscal Year Ended December 31, 2022<BR>
Filed May 22, 2022<BR>
Response Dated June 22, 2023<BR>
File No. 001-12711</B></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Dear Mr. Woody and Mr. Blume:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Ault Alliance, Inc. (the &ldquo;Company&rdquo;)
hereby submits a response to certain comments made by the staff (the &ldquo;Staff&rdquo;) of the Securities and Exchange Commission (the
&ldquo;Commission&rdquo;) in its letter dated September 5, 2023 (the &ldquo;Comment Letter&rdquo;) relating to the Company&rsquo;s June
22, 2023 response to a comment letter related to the Annual Report on Form 10-K/A for the fiscal year ended December 31, 2022 (&ldquo;Form
10-K/A&rdquo;) referenced above.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company&rsquo;s response is numbered to correspond
to the Staff&rsquo;s comment. For your convenience, the Staff&rsquo;s comment contained in the Comment Letter has been restated below
in its entirety, with the Company&rsquo;s response set forth immediately beneath such comment.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><U>Form 10-K/A for the Fiscal Year Ended December
31, 2022</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><U>Notes to Consolidated Financial Statements</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><U>Revenue Recognition</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><U>Bitcoin Mining, page F-20</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><U>Comment No. 1</U>. We note your response
to comment 3. Please provide us with a complete and thorough accounting analysis of your application of each of the five steps in ASC
606 to your participation in Bitcoin mining pools. Ensure your analysis includes, but is not necessarily limited to, the following information:</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>ASC 606 Step 1- Please identify which mining
pools you participate in and for each contract summarize for us the material rights and obligations, including termination rights, of
each party. Explain how you evaluated such termination rights and the guidance in ASC 606-10-25-1 through 9 and FASB Revenue Recognition
Implementation Q&amp;A&rsquo;s 7 and 8 when determining contract inception and duration.</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>ASC 606 Step Two - Explain in further detail
how you determined that your only performance obligation is providing computing power. In doing so, for each contract identify the promises;
more clearly articulate what providing computing power means (e.g., is it a promise to continuously calculate hashes?); whether a valid
share is a promise good or service or alternatively a means to evaluate whether you are continuously calculating hashes and the reasons
why; and provide your analysis as to whether promises are distinct.</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin-top: 0pt; margin-right: 0; margin-bottom: 0pt"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>ASC 606 Step Three - For each mining pool
in which you participate, describe the payout mechanisms for each pool. Tell us if the mechanisms include a variable component and whether
or not you apply the variable consideration constraint. If you do, explain how much variable consideration is constrained and clarify
when the uncertainties underlying the variable consideration are sufficiently resolved such that conditions of constraint no longer apply.
Provide us with a separate analysis for both your share of block rewards and your share of transaction fees.</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin-top: 0pt; margin-right: 0; margin-bottom: 0pt"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>ASC 606 Step Five - Analyze whether you recognize
the related revenues at a point in time or over time under the guidance in ASC 606-10-25-27 through 30.</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><U>Response No. 1</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The following represents, in management&rsquo;s
judgment, a complete and thorough accounting analysis of the application of each of the five steps in ASC 606 to the Company&rsquo;s participation
in Bitcoin mining pools. Analysis as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><U>Step 1: Identify the contract with the customer.</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Please identify which mining pools you participate
in and for each contract summarize for us the material rights and obligations, including termination rights, of each party. Explain how
you evaluated such termination rights and the guidance in ASC 606-10-25-1 through 9 and FASB Revenue Recognition Implementation Q&amp;A&rsquo;s
7 and 8 when determining contract inception and duration.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><U>Analysis and application of ASC 606 related
to Step 1: </U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company has entered into a user service agreement
with one digital asset mining pool, Antpool Technologies Limited, to provide computing power (sending hash rate) to the mining pool. The
Company&rsquo;s customer, as defined in ASC 606-10-20, is the mining pool operator with whom the Company has agreed to the terms of service
and user service agreement. The Company supplies computing power, 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.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company&rsquo;s enforceable right to compensation
begins only when, and lasts as long as, the Company provides computing power 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 computing power. The contracts are terminable at any
time by and at no cost to the Company, and by the pool operator. Providing computing power in digital asset transaction verification services
is an output of the Company&rsquo;s ordinary activities. Providing such computing power is the only performance obligation in the Company&rsquo;s
contract (user service agreement) with the mining pool operator, Antpool Technologies Limited.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Per FASB Revenue Recognition Implementation Q&amp;A
7, if a contract can be terminated by each party at any time without compensating the other party for the termination (that is, other
than paying amounts due as a result of goods or services transferred up to the termination date), the duration of the contract does not
extend beyond the goods or services already transferred.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">A new contract is determined to exist each period
(e.g., second, minute, hour) that computing power is provided and neither the Company, nor the pool operator, terminates the arrangement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In addition, the Company believes it is probable
that the Company will collect substantially all of the consideration to which it will be entitled in exchange for the goods or services
that will be transferred to the customer.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><U>Step 2: Identify the performance obligations in the contract.</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Explain in further detail how you determined
that your only performance obligation is providing computing power. In doing so, for each contract identify the promises; more clearly
articulate what providing computing power means (e.g., is it a promise to continuously calculate hashes?); whether a valid share is a
promise good or service or alternatively a means to evaluate whether you are continuously calculating hashes and the reasons why; and
provide your analysis as to whether promises are distinct.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><U>Analysis and application of ASC 606 related
to Step 2: </U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company supplies computing power, 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.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company&rsquo;s enforceable right to compensation
begins only when, and lasts as long as, the Company provides computing power 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 computing power. The contracts are terminable at any
time by and at no cost to the Company, and by the pool operator. Providing computing power in digital asset transaction verification services
is an output of the Company&rsquo;s ordinary activities. Providing such computing power is the only performance obligation in the Company&rsquo;s
contract with the mining pool operator. A new contract is determined to exist each period (e.g., second, minute, hour) that computing
power is provided and neither the Company, nor the pool operator, terminates the arrangement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In summary, the Company&rsquo;s promise is sending
hash rate to its customer, the mining pool operator. The mining pool operator accepts hash rate and is obligated to pay under the Full-Pay-Per-Share
model based on a contractual formula, which primarily calculates the hash rate provided by the Company to the mining pool as a percentage
of total network hash rate, and other inputs. The Company is entitled to consideration even if a block is not successfully placed by the
mining pool operator. The Company does not consider the calculation of hashes as continuous, but as provided moment by moment, which can
be paused without penalty.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><U>Step 3: Determine the transaction price.</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>For each mining pool in which you participate,
describe the payout mechanisms for each pool. Tell us if the mechanisms include a variable component and whether or not you apply the
variable consideration constraint. If you do, explain how much variable consideration is constrained and clarify when the uncertainties
underlying the variable consideration are sufficiently resolved such that conditions of constraint no longer apply. Provide us with a
separate analysis for both your share of block rewards and your share of transaction fees.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><U>Analysis and application of ASC 606 related
to Step 3: </U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As mentioned above, in exchange for providing
computing power, the Company is entitled to a Full-Pay-Per-Share payout of Bitcoin based on a contractual formula, which primarily calculates
the hash rate provided by the Company to the mining pool as a percentage of total network hash rate, and other inputs. The Company is
entitled to consideration even if a block is not successfully placed by the mining pool operator. Therefore, a separate analysis of block
rewards and transaction fees is not applicable.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">All consideration pursuant to this arrangement
is variable. Based on the terms of the Company&rsquo;s agreement with the mining pool operator and the history of consistent payment of
consideration by the mining pool operator, 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. ASC 606-10-32-21 requires entities to measure the estimated fair value
of noncash consideration at contract inception, which is the same time the contributed computing power is provided to the mining pool
operator each period (e.g., second, minute, hour) that neither the Company, nor the pool operator, terminates the arrangement. For reasons
of operational practicality, the Company applies an accounting convention to use the daily spot price of the Company&rsquo;s principal
market for Bitcoin at the beginning of the day to determine the fair value of Bitcoin earned that day. This accounting convention does
not result in materially different revenue recognition from using the fair value of the Bitcoin earned at contract inception (i.e., the
moment the hash rate is provided to the mining pool operator) and has been consistently applied in all periods presented.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><U>Step 4: Allocate the transaction price to the performance obligations
in the contract.</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><U>Analysis and application of ASC 606 related
to Step 4: </U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Providing computing power is the only performance
obligation in the Company&rsquo;s contract with the mining pool operator. The entire transaction price is allocated to the one performance
obligation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><U>Step 5: Recognize revenue when the company satisfies a performance
obligation.</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Analyze whether you recognize the related revenues
at a point in time or over time under the guidance in ASC 606-10-25-27 through 30.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><U>Analysis and application of ASC 606 related
to Step 5: </U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company satisfies its performance obligation
to provide computing power to the pool operator over time as described in ASC 606-10-25-27(a) as the pool operator simultaneously consumes
and receives benefits from the Company&rsquo;s provision of computing power, which it uses continuously as an input to the pool&rsquo;s
efforts to solve a block.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 35.95pt">Kindly address any comments
or questions that you may have concerning this letter to me (tel.: (949) 735-6020; ken@ault.com).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
  <TR STYLE="vertical-align: top">
    <TD STYLE="width: 50%">&nbsp;</TD>
    <TD STYLE="width: 50%; font-size: 10pt"><FONT STYLE="font-size: 10pt">Very truly yours,</FONT></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; font-size: 10pt"><FONT STYLE="font-size: 10pt">/s/ Kenneth Cragun</FONT></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">Kenneth Cragun, Chief Financial Officer</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 5.95pt"></TD><TD STYLE="width: 36.05pt">cc:</TD><TD STYLE="padding-right: 5in">Milton C. (Todd) Ault, III </TD></TR><TR STYLE="vertical-align: top">
<TD>&nbsp;</TD><TD>&nbsp;</TD><TD STYLE="padding-right: 5in">Henry Nisser, Esq.</TD></TR>
                                                                                                                                                        </TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="margin: 0"></P>

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