Ault Alliance, Inc. (NYSE American: AULT), a diversified holding
company (“AAI” or the “Company”), announced today
that it has entered into a Securities Purchase Agreement (the
“Agreement”) providing for up to $50 million of financing
(the “Financing”) from Ault & Company, Inc., a related
party (“A&C”). Pursuant to the Agreement, AAI has agreed
to issue and sell to A&C up to $50 million in shares of Series
C Convertible Preferred Stock (the “Preferred Shares”). The
Preferred Shares will be senior to all other classes of preferred
stock the Company has outstanding, as well as senior to the
Company’s common stock (“Common Stock”).
Each Preferred Share shall have a stated value of $1,000.00 per
share and, upon stockholder approval, shall be convertible at the
holder’s option into shares of Common Stock at a conversion price
equal to the greater of (i) $0.10 per share (the “Floor
Price”), which Floor Price shall not, except for voting rights
purposes, be adjusted for stock dividends, stock splits, stock
combinations and other similar transactions and (ii) the lesser of
(A) $0.2098, or (B) a 5% premium to the closing sale price of the
Common stock on the day immediately prior to the date of conversion
(the “Conversion Price”). The Conversion Price will be
subject to standard anti-dilution provisions in connection with any
stock split, stock dividend, subdivision or similar
reclassification of the Common Stock. The Preferred Stock also has
“full ratchet” price protection in the event the Company should
issue securities at a lower price than the Conversion Price. The
Preferred Stock shall pay a dividend at an annual rate of 9.5%,
which the Company may, during the first two years, pay in shares of
Common Stock.
The Agreement entitles A&C to exchange the senior secured
convertible promissory note it was issued by the Company on October
13, 2023 for Preferred Shares.
Further, A&C will receive warrants (“Warrants”) to
purchase up to approximately 370 million shares of Common Stock,
presuming that the full amount of the Preferred Shares is sold,
exercisable for five years at $0.1353 per share, subject to
adjustment.
The proceeds from the Financing will be used for the repayment
of outstanding indebtedness, to complete the expansion of the
Company’s Bitcoin mining facilities and general working capital
purposes.
"The conversion price of the Preferred Shares is nearly a 100%
premium over the current market price. That A&C is willing to
invest up to $50 million on those terms should be a clear indicator
of our belief that the market has been undervaluing the Company,
which I've been highlighting for years. This transaction is more
than a number—it’s a declaration of my steadfast confidence in our
data centers, the crane company, the lending firm, and the
exceptional portfolio companies we've nurtured over the past six
years. Each is a vital component of our collective success," said
Milton "Todd" Ault III, Executive Chairman of Ault Alliance and
Chairman & CEO of A&C.
The Agreement provides for several closings through December 29,
2023, though such dates may be extended by A&C as set forth in
the Agreement. The consummation of the transactions contemplated by
the Agreement, specifically the conversion of the Preferred Shares
and the exercise of the Warrants in an aggregate number in excess
of 19.99% on the execution date of the Agreement, are subject to
various customary closing conditions as well as regulatory and
stockholder approval. In addition to customary closing conditions,
the closing of the Financing is also conditioned upon the receipt
by A&C of financing to consummate the transaction.
Additional information regarding the securities described above
and the terms of the Financing will be included in a Current Report
on Form 8-K to be filed with the United States Securities and
Exchange Commission (“SEC”).
The Preferred Shares and Warrants will be 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.
For more information on Ault Alliance and its subsidiaries, the
Company recommends that stockholders, investors and any other
interested parties read the Company’s public filings and press
releases available under the Investor Relations section at
www.Ault.com or available at www.sec.gov.
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
offers colocation and hosting services for the emerging artificial
intelligence ecosystems and other industries, 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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Ault Alliance Investor Contact: IR@ault.com or
1-888-753-2235
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