Ault Alliance Announces Agreement to Sell $10.0 Million Stated Value of Convertible Preferred Stock
March 29 2023 - 6:30AM
Business Wire
Ault Alliance, Inc. (NYSE American: AULT), a diversified holding
company (“Ault Alliance” or the “Company”), today
announced that it has entered into a securities purchase agreement
with certain institutional investors to purchase an aggregate of
100,000 shares of preferred stock of the Company, consisting of (i)
83,000 shares of Series E Convertible Preferred Stock (the
“Series E Preferred Stock”), (ii) 1,000 shares of Series F
Convertible Preferred Stock (the “Series F Preferred Stock”)
and (iii) 16,000 shares of Series G Convertible Preferred Stock
(the “Series G Preferred Stock” and collectively, the
“Preferred Shares”). Each share of Series E Preferred Stock
and Series F Preferred Stock has a purchase price of $100.00, equal
to each such share’s stated value. The purchase price of the Series
E Preferred Stock and the Series F Preferred Stock will be paid for
by the investors’ agreement to cancel outstanding secured
promissory notes in the principal amount of $8.4 million, whereas
the purchase price of the shares of Series G Preferred Stock will
consist of accrued but unpaid interest on these notes, as well as
for other good and valuable consideration. Each Preferred Share is
convertible into shares of the Company’s common stock (the
“Common Stock”) at a conversion price equal to 85% of the
closing sale price of the Common Stock on the trading day prior to
the date of conversion, subject to a floor price of $0.10. The
Preferred Shares are convertible at the option of the holder at any
time following the Company’s receipt of stockholder approval of a
reverse stock split of the Common Stock. The Company has the right
to force the conversion on the Preferred Shares under certain
circumstances.
The Company has agreed to issue the shares of Common Stock
issuable upon conversion of the Preferred Shares under its existing
“shelf” registration statement.
The Series E Preferred Stock and Series F Preferred Stock
permits the holders thereof to vote together with the holders of
the Company’s common stock on a proposal to effectuate a reverse
stock split of the Common Stock. The Series F Preferred Stock
permits the holder to cast 100,000 votes per share of Series F
Preferred Stock on such proposal, provided, that such votes must be
cast in the same proportions as the shares of Common Stock, the
Company’s existing Series B preferred stock and the Series E
Preferred Stock are voted on that proposal (excluding any shares of
Common Stock that are not voted on the proposal). Except as
required by law or expressly provided by the certificates of
designation, holders of the Series E Preferred Stock and Series F
Preferred Stock will not be permitted to vote on any other matters.
The holders of the Series E Preferred Stock and Series F Preferred
Stock agreed not to transfer, offer, sell, contract to sell,
hypothecate, pledge or otherwise dispose of the Preferred Shares
until after the receipt of stockholder approval of the reverse
stock split. The Series G Preferred Stock does not carry any voting
rights, except as required by law or expressly provided by its
certificate of designation. For a period of 90 days after the first
conversion of Preferred Shares, each investor shall have the right
to purchase a convertible note in the principal face amount of
$4.95 million from the Company for $4.2 million, which notes will
be convertible into Common Stock at a conversion price equal to 85%
of the prior day’s closing trading price.
The closing of the offering is expected to occur on or about
March 30, 2023, subject to the satisfaction of customary closing
conditions. Additional information regarding the securities
described above and the terms of the offering are included in a
Current Report on Form 8-K to be filed with the United States
Securities and Exchange Commission (“SEC”).
The Preferred Shares are being issued in reliance upon the
exemption from the securities registration afforded by Section
4(a)(2) of the Securities Act of 1933, as amended (the
“Securities Act”) as promulgated by SEC under the Securities
Act.
This press release does not constitute an offer to sell or the
solicitation of an offer to buy the securities, nor will there be
any sale of the securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful prior to the registration or
qualification under the securities laws of such jurisdiction.
About Ault Alliance, Inc.
Ault Alliance, Inc. 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, Ault
Alliance owns and operates a data center at which it mines Bitcoin
and provides mission-critical products that support a diverse range
of industries, including metaverse platform, oil exploration, crane
services, defense/aerospace, industrial, automotive,
medical/biopharma, consumer electronics, hotel operations and
textiles. In addition, Ault Alliance extends credit to select
entrepreneurial businesses through a licensed lending subsidiary.
Ault Alliance’s headquarters are located at 11411 Southern
Highlands Parkway, Suite 240, Las Vegas, NV 89141;
www.ault.com.
Forward-Looking Statements
This press release contains “forward-looking statements” within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. These forward-looking statements generally include
statements that are predictive in nature and depend upon or refer
to future events or conditions, and include words such as
“believes,” “plans,” “anticipates,” “projects,” “estimates,”
“expects,” “intends,” “strategy,” “future,” “opportunity,” “may,”
“will,” “should,” “could,” “potential,” or similar expressions.
Statements that are not historical facts are forward-looking
statements. Forward-looking statements are based on current beliefs
and assumptions that are subject to risks and uncertainties.
Forward-looking statements speak only as of the date they are made,
and the Company undertakes no obligation to update any of them
publicly in light of new information or future events. Actual
results could differ materially from those contained in any
forward-looking statement as a result of various factors. More
information, including potential risk factors, that could affect
the Company’s business and financial results are included in the
Company’s filings with the U.S. Securities and Exchange Commission,
including, but not limited to, the Company’s Forms 10-K, 10-Q and
8-K. All filings are available at www.sec.gov and on the Company’s
website at www.ault.com.
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