Hyperscale Data, Inc 10-Q for FY2024 Q1

Hyperscale Data, Inc. (GPUS)

10-Q 2024-05-20 For: 2024-03-31

Added on April 06, 2026

About this 10-Q

Hyperscale Data, Inc filed this 10-Q on May 20, 2024, covering the quarter ended March 31, 2024 (FY2024 Q1).

Headline figures

Quarter ended March 31, 2024, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $44.93M; up 55.2% from $28.94M a year earlier
Net income: $3.72M; compared with a net loss of $48.65M a year earlier
Diluted EPS: $0.09; compared with -$1,039.89 a year earlier

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Delaware	94-1721931
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)

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

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A Common Stock, $0.001 par value	AULT	NYSE American
13.00% Series D Cumulative Redeemable Perpetual Preferred Stock, par value $0.001 per share	AULT PRD	NYSE American

Large accelerated filer ¨	Accelerated filer ¨
Non-accelerated filer x	Smaller reporting company x
Emerging growth company ¨

		Page
PART I – FINANCIAL INFORMATION

Item 1.	Financial Statements (Unaudited)

	Condensed Consolidated Balance Sheets as of March 31, 2024 and December 31, 2023	F-1

	Condensed Consolidated Statements of Operations and Comprehensive Loss for the three months ended March 31, 2024 and 2023	F-3

	Condensed Consolidated Statements of Changes in Stockholders’ Equity for the three months ended March 31, 2024 and 2023	F-4

	Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2024 and 2023	F-6

	Notes to Condensed Consolidated Financial Statements	F-8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	7

Item 4.	Controls and Procedures	7

PART II – OTHER INFORMATION

Item 1.	Legal Proceedings	9
Item 1A.	Risk Factors	9
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	9
Item 3.	Defaults Upon Senior Securities	9
Item 4.	Mine Safety Disclosures	9
Item 5.	Other Information	9
Item 6.	Exhibits	9


	March 31,		December 31,
	2024		2023
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	9,430,000	$	8,626,000
Restricted cash		5,463,000		4,966,000
Marketable equity securities		9,426,000		27,000
Accounts receivable, net		11,579,000		10,839,000
Inventories		7,599,000		8,384,000
Investment in promissory notes and other, related party		-		3,968,000
Loans receivable, current		1,364,000		1,234,000
Prepaid expenses and other current assets		8,035,000		9,450,000
Current assets of discontinued operations		91,872,000		90,991,000
TOTAL CURRENT ASSETS		144,768,000		138,485,000

Cash and marketable securities held in trust account		794,000		2,200,000
Intangible assets, net		5,482,000		5,754,000
Goodwill		6,010,000		6,088,000
Property and equipment, net		103,989,000		108,829,000
Right-of-use assets		7,211,000		6,315,000
Investments in common stock and equity securities, related party		2,768,000		679,000
Investments in other equity securities		20,077,000		21,767,000
Other assets		8,678,000		9,073,000
TOTAL ASSETS	$	299,777,000	$	299,190,000

LIABILITIES AND STOCKHOLDERS’ EQUITY

CURRENT LIABILITIES
Accounts payable and accrued expenses	$	61,759,000	$	66,443,000
Operating lease liability, current		2,385,000		2,119,000
Notes payable, current		12,370,000		12,866,000
Notes payable, related party, current		293,000		2,375,000
Convertible notes payable, current		11,131,000		11,763,000
Guarantee liability		38,900,000		38,900,000
Current liabilities of discontinued operations		71,405,000		70,361,000
TOTAL CURRENT LIABILITIES		198,243,000		204,827,000

x	Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

	For the quarterly period ended March 31, 2024

¨	Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

	For the transition period from ________ to ________.


	For the Three Months Ended March 31,
	2024			2023
Revenue	$	11,468,000		$	13,889,000
Revenue, digital assets mining		11,447,000			7,347,000
Revenue, crane operations		12,918,000			12,646,000
Revenue, lending and trading activities		9,099,000			(4,939,000	)
Total revenue		44,932,000			28,943,000
Cost of revenue, products		9,164,000			9,787,000
Cost of revenue, digital assets mining		8,544,000			8,103,000
Cost of revenue, crane operations		7,715,000			7,388,000
Cost of revenue, lending and trading activities		-			1,180,000
Total cost of revenue		25,423,000			26,458,000
Gross profit		19,509,000			2,485,000
Operating expenses
Research and development		1,072,000			1,842,000
Selling and marketing		4,660,000			8,796,000
General and administrative		13,380,000			21,571,000
Impairment of mined digital assets		-			139,000
Total operating expenses		19,112,000			32,348,000
Income (loss) from operations		397,000			(29,863,000	)
Other income (expense):
Interest and other income		583,000			1,197,000
Interest expense		(4,900,000	)		(12,100,000	)
Gain on conversion of investment in equity securities to marketable equity securities		17,900,000			-
Gain (loss) on extinguishment of debt		1,405,000			(63,000	)
Loss from investment in unconsolidated entity		(667,000	)		-
Impairment of equity securities		-			(9,555,000	)
Provision for loan losses, related party		(3,068,000	)		-
Gain on the sale of fixed assets		68,000			4,515,000
Total other income (expense), net		11,321,000			(16,006,000	)
Income (loss) before income taxes		11,718,000			(45,869,000	)
Income tax benefit		(44,000	)		(263,000	)
Net income (loss) from continuing operations		11,762,000			(45,606,000	)
Net loss from discontinued operations		(1,801,000	)		(3,223,000	)
Net income (loss)		9,961,000			(48,829,000	)
Net (income) loss attributable to non-controlling interest		(6,244,000	)		183,000
Net income (loss) attributable to Ault Alliance, Inc.		3,717,000			(48,646,000	)
Preferred dividends		(1,260,000	)		(229,000	)
Net income (loss) available to common stockholders	$	2,457,000		$	(48,875,000	)

Basic net income (loss) per common share:
Continuing operations	$	0.26		$	(971.32	)
Discontinued operations		(0.11	)		(68.57	)
Basic net income (loss) per common share	$	0.15		$	(1,039.89	)

Diluted net income (loss) per common share:
Continuing operations	$	0.14		$	(971.32	)
Discontinued operations		(0.05	)		(68.57	)
Diluted net income (loss) per common share	$	0.09		$	(1,039.89	)

Weighted average common shares outstanding:
Basic		16,116,000			47,000
Diluted		36,493,000			47,000

Comprehensive income (loss)
Net income (loss) available to common stockholders	$	2,457,000		$	(48,875,000	)
Foreign currency translation adjustment		36,000			170,000
Other comprehensive income		36,000			170,000
Total comprehensive income (loss)	$	2,493,000		$	(48,705,000	)


	Preferred Stock																			Additional						Other			Non-						Total
	Series A				Series C					Series D					Class A Common Stock					Paid-In			Accumulated			Comprehensive			Controlling			Treasury			Stockholders’
	Shares		Par Amount		Shares			Par Amount		Shares			Par Amount		Shares			Amount		Capital			Deficit			Loss			Interest			Stock			Equity
BALANCES, January 1, 2024		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
Issuance of Series C preferred stock, related party		-		-		2,000			-		-			-		-			-		1,818,000			-			-			-			-			1,818,000
Fair value of warrants issued in connection with Series C preferred stock, related party		-		-		-			-		-			-		-			-		182,000			-			-			-			-			182,000
Stock-based compensation																					577,000			-			-			-			-			577,000
Issuance of Class A common stock for cash		-		-		-			-		-			-		25,609,079			26,000		14,573,000			-			-			-			-			14,599,000
Financing cost in connection with sales of Class A common stock		-		-		-			-		-			-		-			-		(513,000	)		-			-			-			-			(513,000	)
Remeasurement of Ault Disruptive subsidiary temporary equity		-		-		-			-		-			-		-			-		-			(23,000	)		-			-			-			(23,000	)
Sale of subsidiary stock to non-controlling interests		-		-		-			-		-			-		-			-		-			-			-			1,485,000			-			1,469,000
Distribution to Circle 8 Crane Services, LLC (“Circle 8”) non-controlling interest		-		-		-			-		-			-		-			-		-			-			-			(170,000	)		-			(170,000	)
Conversion of RiskOn International, Inc. (“ROI”) convertible note		-		-		-			-		-			-		-			-		-			-			-			863,000			-			863,000
Net income		-		-		-	-		-		-			-		-			-		-			3,717,000			-			-			-			3,717,000
Series A preferred dividends ($0.63 per share)																								(4,000	)											(4,000	)
Series C preferred dividends ($25.53 per share)																								(992,000	)											(992,000	)
Series D preferred dividends ($0.81 per share)																								(264,000	)											(264,000	)
Foreign currency translation adjustments		-		-		-			-		-			-		-			-		-			-			36,000			-			-			36,000
Net income attributable to non-controlling interest		-		-		-			-		-			-		-			-		-			-			-			6,244,000			-			6,244,000
Distribution of securities of TurnOnGreen, Inc. (“TurnOnGreen”) to Ault Alliance Class A common stockholders ($2.02 per share)		-		-		-			-		-			-		-			-		(4,900,000	)		-			-			4,900,000			-			-
Distribution of ROI investment in White River Energy Corp (“White River”) to ROI stockholders		-		-		-			-		-			-		-			-		-			-			-			(19,210,000	)		-			(19,210,000	)
Other		-		-		-			-		(101,362	)		-		(27,199	)		-		(2,000	)		-			-			-			-			(2,000	)
BALANCES, March 31, 2024		7,040	$	-		43,500	-	$	-		323,835		$	-		30,065,339		$	30,000	$	656,587,000		$	(565,035,000	)	$	(2,061,000	)	$	6,069,000		$	(30,571,000	)	$	65,019,000


	For the Three Months Ended March 31,
	2024			2023
Cash flows from operating activities:
Net income (loss)	$	9,961,000		$	(48,829,000	)
Net loss from discontinued operations		(1,801,000	)		(3,223,000	)
Net income (loss) from continuing operations		11,762,000			(45,606,000	)
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities:
Depreciation and amortization		5,935,000			5,325,000
Amortization of debt discount		3,653,000			10,302,000
Amortization of right-of-use assets		583,000			877,000
Stock-based compensation		577,000			4,548,000
Gain on the sale of fixed assets		(68,000	)		(4,515,000	)
Impairment of equity securities		-			11,555,000
Impairment of digital assets		-			139,000
Realized gain on the sale of digital assets		(738,000	)		(250,000	)
Revenue, digital assets mining		(8,862,000	)		(7,347,000	)
Realized gains on sale of marketable securities		-			3,627,000
Gain on conversion of investment in equity securities to marketable equity securities		(17,900,000	)		-
Unrealized gains on marketable securities		(8,899,000	)		(1,908,000	)
Unrealized (gains) losses on investments in common stock, related parties		(84,000	)		1,598,000
Income from cash held in trust		(21,000	)		-
Provision for loan losses		-			1,180,000
Provision for loan losses, related party		3,068,000			-
(Gain) loss on extinguishment of debt		(1,405,000	)		63,000
Other		(1,196,000	)		(83,000	)
Changes in operating assets and liabilities:
Proceeds from the sale of digital assets		8,634,000			7,780,000
Marketable equity securities		-			21,986,000
Accounts receivable		(995,000	)		5,030,000
Inventories		775,000			1,936,000
Prepaid expenses and other current assets		1,041,000			(687,000	)
Other assets		395,000			(490,000	)
Accounts payable and accrued expenses		(4,385,000	)		(3,801,000	)
Lease liabilities		(348,000	)		(910,000	)
Net cash (used in) provided by operating activities from continuing operations		(8,478,000	)		10,349,000
Net cash used in operating activities from discontinued operations		(1,738,000	)		(2,646,000	)
Net cash (used in) provided by operating activities		(10,216,000	)		7,703,000
Cash flows from investing activities:
Purchase of property and equipment		(882,000	)		(4,308,000	)
Investments in loans receivable		(134,000	)		(181,000	)
Investments in non-marketable equity securities		(120,000	)		(102,000	)
Proceeds from the sale of fixed assets		-			4,515,000
Other		(5,000	)		22,000
Net cash used in investing activities from continuing operations		(1,141,000	)		(54,000	)
Net cash used in investing activities from discontinued operations		(589,000	)		(2,713,000	)
Net cash used in investing activities		(1,730,000	)		(2,767,000	)

Schedule of assets and liabilities of agree operations
	March 31,		December 31,
	2024		2023
Cash and cash equivalents	$	1,285,000	$	1,080,000
Restricted cash		859,000		697,000
Accounts receivable		204,000		247,000
Inventories		59,000		50,000
Property and equipment, net - current		89,114,000		88,525,000
Prepaid expenses and other current assets		351,000		392,000
Total current assets		91,872,000		90,991,000

Property and equipment, net		-		-
Total assets		91,872,000		90,991,000
Accounts payable and accrued expenses		2,985,000		3,099,000
Notes payable, current		68,420,000		67,262,000
Total current liabilities		71,405,000		70,361,000

Total liabilities		71,405,000		70,361,000
Net assets of discontinued operations	$	20,467,000	$	20,630,000

Schedule of estimated costs to sell and expected
	For the Three Months Ended
	March 31,
	2024			2023
Revenue, hotel and real estate operations	$	3,006,000		$	2,243,000
Cost of revenue, hotel operations		2,817,000			2,688,000
Gross profit		189,000			(445,000	)
General and administrative		407,000			1,110,000
Total operating expenses		407,000			1,110,000
Loss from operations		(218,000	)		(1,555,000	)
Interest expense		(1,583,000	)		(1,668,000	)
Net loss from discontinued operations	$	(1,801,000	)	$	(3,223,000	)

Schedule of cash flow activity related to discontinued operations
	For the Three Months Ended March 31,
	2024			2023
Cash flows from operating activities:
Net loss	$	(1,801,000	)	$	(3,223,000	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization		-			838,000
Amortization of debt discount		101,000			98,000
Changes in operating assets and liabilities:
Accounts receivable		43,000			114,000
Inventories		(9,000	)		(12,000	)
Prepaid expenses and other current assets		41,000			(32,000	)
Accounts payable and accrued expenses		(113,000	)		(429,000	)
Net cash used in operating activities		(1,738,000	)		(2,646,000	)
Cash flows from investing activities:
Purchase of property and equipment		(589,000	)		(2,713,000	)
Net cash used in investing activities		(589,000	)		(2,713,000	)
Cash flows from financing activities:
Proceeds from notes payable		1,056,000			2,498,000
Cash contributions from parent		1,639,000			81,000
Net cash provided by financing activities		2,695,000			2,579,000
Net increase (decrease) in cash and cash equivalents and restricted cash		368,000			(2,780,000	)

Cash and cash equivalents and restricted cash at beginning of period		1,776,000			5,381,000

Cash and cash equivalents and restricted cash at end of period	$	2,144,000		$	2,601,000

Supplemental disclosures of cash flow information:
Cash paid during the period for interest	$	1,583,000		$	1,668,000

Schedule of disaggregated revenues
	GIGA		TurnOnGreen		Fintech		Sentinum		Energy		ROI		Holding Company		Total
Primary Geographical Markets
North America	$	2,065,000	$	1,157,000	$	-	$	11,749,000	$	12,918,000	$	28,000	$	301,000	$	28,218,000
Europe		2,511,000		4,000		-		-		39,000		-		-		2,554,000
Middle East and other		4,997,000		64,000		-		-		-		-		-		5,061,000
Revenue from contracts with customers		9,573,000		1,225,000		-		11,749,000		12,957,000		28,000		301,000		35,833,000
Revenue, lending and trading activities (North America)		-		-		9,099,000		-		-		-		-		9,099,000
Total revenue	$	9,573,000	$	1,225,000	$	9,099,000	$	11,749,000	$	12,957,000	$	28,000	$	301,000	$	44,932,000

Major Goods or Services
Radio frequency/microwave filters	$	2,091,000	$	-	$	-	$	-	$	-	$	-	$	-	$	2,091,000
Power supply units and systems		2,260,000		1,225,000		-		-		-		-		-		3,485,000
Healthcare diagnostic systems		531,000		-		-		-		-		-		-		531,000
Defense systems		4,691,000		-		-		-		-		-		-		4,691,000
Digital assets mining		-		-		-		11,447,000		-		-		-		11,447,000
Crane rental		-		-		-		-		12,918,000		-		-		12,918,000
Other		-		-		-		302,000		39,000		28,000		301,000		670,000
Revenue from contracts with customers		9,573,000		1,225,000		-		11,749,000		12,957,000		28,000		301,000		35,833,000
Revenue, lending and trading activities		-		-		9,099,000		-		-		-		-		9,099,000
Total revenue	$	9,573,000	$	1,225,000	$	9,099,000	$	11,749,000	$	12,957,000	$	28,000	$	301,000	$	44,932,000

Timing of Revenue Recognition
Goods and services transferred at a point in time	$	4,762,000	$	10,000	$	-	$	11,749,000	$	39,000	$	28,000	$	301,000	$	16,889,000
Services transferred over time		4,811,000		1,215,000		-		-		12,918,000		-		-		18,944,000
Revenue from contracts with customers	$	9,573,000	$	1,225,000	$	-	$	11,749,000	$	12,957,000	$	28,000	$	301,000	$	35,833,000

Fair value, assets measured on recurring basis
	Fair Value Measurement at March 31, 2024
	Total		Level 1		Level 2		Level 3
Assets:
Investment in common stock of Alzamend Neuro, Inc. (“Alzamend”) – a related party	$	768,000	$	768,000	$	-	$	-
Investments in marketable equity securities		9,426,000		9,426,000		-		-
Cash and marketable securities held in trust account		794,000		794,000		-		-
Total assets measured at fair value	$	10,988,000	$	10,988,000	$	-	$	-

Liabilities:
Warrant and embedded conversion feature liabilities	$	715,000	$	-	$	-	$	715,000
Convertible promissory notes		21,180,000		-		-		21,180,000
Total liabilities measured at fair value	$	21,895,000	$	-	$	-	$	21,895,000

	Fair Value Measurement at December 31, 2023
	Total		Level 1		Level 2		Level 3
Assets:
Investment in common stock of Alzamend	$	679,000	$	679,000	$	-	$	-
Investments in marketable equity securities		27,000		27,000		-		-
Cash and marketable securities held in trust account		2,200,000		2,200,000		-		-
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

Schedule of changes in fair value hierarchy
	Level 3 Balance at Beginning of Period		Fair Value Adjustments			Purchases, Sales and Settlements		Transfer in and/or out of Level 3			Level 3 Balance at End of Period
Three months ended March 31, 2024
Warrant and embedded conversion feature liabilities	$	1,742,000	$	(1,027,000	)	$	-	$	-		$	715,000
Convertible promissory notes		22,485,000		-			770,000		(2,075,000	)		21,180,000

Three months ended March 31, 2023
Warrant and embedded conversion feature liabilities	$	2,967,000	$	(1,311,000	)	$	1,530,000	$	-		$	3,186,000
Series E, F and G preferred stock liabilities				-			8,500,000		-			8,500,000
Convertible promissory notes		10,571,000		-			2,205,000		-			12,776,000

Schedule of marketable securities
	Marketable equity securities at March 31, 2024
			Gross unrealized		Gross unrealized
	Cost		gains		losses			Fair value
Common shares	$	5,581,000	$	8,910,000	$	(5,065,000	)	$	9,426,000

		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	)	$	27,000

Schedule of revenue from digital assets
	For the Three Months Ended
	March 31,
	2024		2023
Revenue from mined digital assets at Sentinum owned and operated facilities	$	8,862,000	$	7,347,000
Revenue from Sentinum mining equipment hosted at third-party facilities		2,585,000		-
Revenue, digital assets mining	$	11,447,000	$	7,347,000

Schedule of activities of the digital assets
	Digital Assets
Balance at January 1, 2024	$	546,000
Additions of mined digital assets		8,862,000
Payments to vendors		(8,000	)
Sale of digital assets		(8,634,000	)
Payment of notes payable with digital assets		(506,000	)
Payment of interest payable with digital assets		(142,000	)
Realized gain on sale of digital assets		738,000
Unrealized gain on digital assets		43,000
Balance at March 31, 2024	$	899,000

	Digital Assets
Balance at January 1, 2023	$	554,000
Additions of mined digital assets		7,347,000
Payments to vendors		(139,000	)
Sale of digital assets		(7,780,000	)
Realized gain on sale of digital assets		250,000
Balance at March 31, 2023	$	232,000

Schedule of property and equipment
	March 31, 2024			December 31, 2023
Building, land and improvements	$	16,161,000		$	15,752,000
Digital assets mining equipment		50,640,000			50,640,000
Crane rental equipment		34,228,000			34,469,000
Computer, software and related equipment		14,885,000			14,335,000
Aircraft		15,983,000			15,983,000
Other property and equipment		8,751,000			8,603,000
		140,648,000			139,782,000
Accumulated depreciation and amortization		(36,659,000	)		(30,953,000	)
Property and equipment, net	$	103,989,000		$	108,829,000

Schedule of depreciation
	For the Three Months Ended
	March 31,
	2024		2023
Depreciation expense	$	5,778,000	$	5,072,000

Schedule of intangible asset
	Useful Life	March 31, 2024			December 31, 2023
Definite lived intangible assets:
Developed technology	3-8 years	$	1,807,000		$	1,949,000
Customer list	8-10 years		3,567,000			3,596,000
Trade names	5-10 years		1,030,000			1,030,000
Domain name and other intangible assets	5 years		603,000			612,000
			7,007,000			7,187,000
Accumulated amortization			(1,998,000	)		(1,910,000	)
Total definite-lived intangible assets		$	5,009,000		$	5,277,000

Indefinite lived intangible assets:
Trade name and trademark	Indefinite life		473,000			477,000
Total intangible assets, net		$	5,482,000		$	5,754,000

Schedule of indefinite-lived intangible assets
	For the Three Months Ended
	March 31,
	2024		2023
Amortization expense	$	157,000	$	253,000

Schedule of estimated amortization expense
2024 (remainder)	$	628,000
2025		704,000
2026		704,000
2027		704,000
2028		693,000
2029		473,000
Thereafter		1,103,000
	$	5,009,000

Schedule of goodwill
	Goodwill
Balance as of January 1, 2024	$	6,088,000
Effect of exchange rate changes		(78,000	)
Balance as of March 31, 2024	$	6,010,000

Schedule of investment
	Interest	Due	March 31,		December 31,
	Rate	Date	2024		2023
Promissory note, related party	8%	Dec. 31, 2024	$	-	$	2,500,000
Accrued interest receivable Ault & Company				-		568,000
Other - Alzamend				-		900,000
Total investment in promissory notes and other, related parties			$	-	$	3,968,000

Schedule of Interest income, related party
	For the Three Months Ended
	March 31,
	2024		2023
Interest income, related party	$	-	$	50,000

Schedule of investment in common stock
	Investments in common stock, related parties at March 31, 2024
	Cost		Gross unrealized losses			Fair value
Common shares	$	24,694,000	$	(23,926,000	)	$	768,000

Schedule of investment in warrants and common stock
	For the Three Months Ended March 31,
	2024		2023
Balance at January 1	$	679,000	$	6,449,000
Investment in common stock of Alzamend		5,000		5,000
Unrealized gain (loss) in common stock of Alzamend		84,000		(1,598,000	)
Balance at March 31	$	768,000	$	4,856,000

Schedule of investment in warrants and preferred stock
	March 31,		December 31,
	2024		2023
Investment in Alzamend preferred stock	$	2,000,000	$	-
Total investment in other investments securities, related party	$	2,000,000	$	-

Schedule of equity investments in unconsolidated entity – SMC
Rollforward investment in unconsolidated entity	Amount
Beginning balance - January 1, 2024	$	1,957,000
Loss from investment in unconsolidated entity		(667,000	)
Ending balance - March 31, 2024	$	1,290,000

Schedule of summarized statements of operations
	For the Three Months Ended
	March 31,
	2024
Revenue	$	2,426,000
Gross profit	$	502,000
Loss from operations	$	(2,287,000	)
Net loss	$	(2,368,000	)