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SUBSEQUENT EVENTS | 6 Months Ended
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Jun. 30, 2024
Subsequent Events [Abstract] |
SUBSEQUENT EVENTS | 28. SUBSEQUENT EVENTS Additional Closing of Series C Preferred Stock, Related Party On August 2, 2024, the Company sold to Ault & Company 300 shares of Series C Preferred Stock and Warrants to purchase 0.1 million shares of Class A common stock, for a total purchase price of $0.3 million. Term Note On July 2, 2024, the Company entered into a term note agreement with institutional investors of up to $2.6 million, of which the principal amount of $1.8 million was immediately funded. The term note was issued at a discount, with net proceeds to the Company of $1.5 million. The term note does not accrue any interest. The term note was scheduled to mature on August 2, 2024. The term note is guaranteed by Mr. Ault. The term note maturity was extended to September 16, 2024, and an extension fee of $0.2 million accrues monthly until the term note is paid in full. Amendment to Loan and Guarantee Agreement On July 25, 2024, the loan and guarantee agreement, dated as of December 14, 2023, as amended, pursuant to which the Company has guaranteed financial obligations of Ault & Company borrowings, was amended to extend the deadline, from July 22, 2024 to July 31, 2024, by which date the Company was required to have the $7.4 minimum balance in the restricted cash account and required that the Company deposit $600,000 in the Segregated account on July 25, 2024. On August 16, 2024, the Company agreed to deposit, by no later than September 1, 2024, an additional $1.5 million into the Segregated Account as well as make a modification payment to the institutional lenders in the amount of $0.3 million by no later than September 15, 2024. As a result of the foregoing amendments, the Company is required to deposit additional incremental amounts such that at or prior to the nine-month anniversary, the one-year anniversary and the two-year anniversary of December 14, 2023, the Company shall have deposited the required funds such that the balance in the Segregated Account shall not be less than $15.0 million, $20.0 million and $27.5 million, respectively. Convertible Promissory Note On July 18, 2024 the Company entered into a note purchase agreement (the “Purchase Agreement”) with an institutional investor (the “Investor”) pursuant to which the Investor purchased from the Company, on July 19, 2024, in a registered direct offering, a $5.4 million 10% OID Convertible Promissory Note (the “Note”). The Note was sold to the Investor for a purchase price of $4.9 million, which includes an original issue discount of $0.5 million. The Note accrues interest at the rate of 15%. The Note will mature on October 19, 2024. The Note is convertible into shares of Series A common stock at a conversion price of $0.22 per share (the “Conversion Price”), subject to adjustment. If, on September 2, 2024 (the “Adjustment Date”), the closing bid price of the Series A common stock is lower than the Conversion Price, then the Conversion Price shall be reduced to eighty-five percent (85%) of the closing bid price of the Series A common stock on the Adjustment Date. However, if, after the issuance date and prior to the date on which the Company obtains stockholder approval of the Note (the “Stockholder Approval”), the holder of the Note has converted a portion of the outstanding amount under the Note into Series A common stock in an aggregate amount equal to 19.99% of the total shares of Series A common stock issued and outstanding as of the execution date of the Purchase Agreement, in accordance with the rules and regulations of the NYSE, then the Adjustment Date shall be extended by such number of days between such date and the date on which the Company obtains Stockholder Approval. Merger Agreement On June 23, 2024, Ault Disruptive entered into an Agreement and Plan of Merger (as it may be amended, supplemented or otherwise modified from time to time, the “Merger Agreement”) by and among Ault Disruptive, ADRT Merger Sub, Inc., a Delaware corporation and a direct, wholly owned subsidiary of Ault Disruptive (“Merger Sub”), and Gresham Worldwide, Inc., a California corporation (“GIGA”). The transactions contemplated by the Merger Agreement are referred to herein as the “Business Combination.” Pursuant to the Merger Agreement and subject to the terms and conditions set forth therein, the Merger Sub was intended to merge with and into GIGA (the “Merger”), with GIGA being the surviving corporation and thereby becoming a wholly owned subsidiary of Ault Disruptive. Upon the Closing of the Business Combination (the “Effective Time”), it was expected that Ault Disruptive would be renamed Gresham Worldwide, Inc., and thereafter remain listed on the NYSE American under a new ticker symbol, “GWWI.” However, on August 14, 2024, GIGA filed a petition for reorganization under Chapter XI of the bankruptcy laws. Consequently, Ault Disruptive was required to terminate the Merger Agreement, which it did on August 15, 2024. Ault Disruptive does not presently intend to enter into a new agreement and plan of merger with a third party.

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- Definition The entire disclosure for significant events or transactions that occurred after the balance sheet date through the date the financial statements were issued or the date the financial statements were available to be issued. Examples include: the sale of a capital stock issue, purchase of a business, settlement of litigation, catastrophic loss, significant foreign exchange rate changes, loans to insiders or affiliates, and transactions not in the ordinary course of business. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 855 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/855/tableOfContent Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 855 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147483399/855-10-50-2 + Details
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