Ault Alliance Announces Results of Annual Meeting of Stockholders

Rhea-AI Summary

Ault Alliance, Inc. (AULT) announced the results of its annual stockholders meeting, including the approval of a reverse stock split, with a ratio of not less than one-for-five and not more than one-for-twenty-five. The reverse stock split will be effective on January 16, 2024, and will affect all issued and outstanding shares of the company's Common Stock. Stockholders who would otherwise be entitled to receive a fractional share will instead receive a cash payment. The Company anticipates that beginning with the opening of trading on January 17, 2024, the Common Stock will trade on the NYSE American on a split-adjusted basis under a new CUSIP number, 09175M 507.

Insights

Financial Analyst

The announcement of a reverse stock split by Ault Alliance, Inc. is a significant event that can influence investor perception and the company's stock market performance. A reverse stock split is often employed by companies to boost the market price of their shares, aiming to meet exchange listing requirements or to improve the stock's image among investors. The selected ratio of one-for-twenty-five is quite aggressive, indicating a considerable reduction in the number of shares outstanding.

From a financial perspective, the reverse split does not inherently change the company's valuation, as it is a cosmetic change to the stock structure. However, it may lead to improved trading liquidity and potentially attract institutional investors who might have previously avoided the stock due to its lower price. The short-term market reaction can be volatile, as traders adjust to the new price levels and share structure.

Long-term implications include the potential for increased investor confidence if the stock maintains a higher price level. However, if the underlying business fundamentals do not support the higher stock price post-split, there could be negative pressure on the stock. Additionally, the reverse split will affect the number of shares available for issuance under equity incentive plans, which could impact future employee compensation strategies.

Market Research Analyst

The reverse stock split by Ault Alliance, Inc. reflects broader market trends where companies use structural changes to align with investor expectations and regulatory standards. The market's response to such strategic moves can serve as an indicator of the company's perceived value and management's ability to navigate financial markets effectively.

A critical factor in evaluating the impact of this reverse stock split is the company's historical stock performance and the reasons prompting the split. If the company's performance has been lackluster, the split may be seen as a red flag by the market, suggesting possible desperation to maintain listings or attract superficial interest. On the other hand, if the company is fundamentally strong, the reverse split could be interpreted as a strategic step towards a more robust financial structure, potentially leading to a positive market response.

It is also important to consider the timing of the split and its alignment with the company's financial calendar and market conditions. The execution of the split at the beginning of the fiscal year could be part of a larger strategic plan that may include other initiatives aimed at driving growth and improving financial health.

Legal Expert

The legal implications of a reverse stock split, as announced by Ault Alliance, Inc., are multifaceted. The company must adhere to both state corporate law and federal securities regulations. The Delaware state law governs the mechanics of the reverse stock split and the Securities and Exchange Commission (SEC) oversees disclosures and procedural compliance for the protection of investors.

The company's decision to not issue fractional shares but instead provide a cash payment for fractional entitlements is a common practice to simplify the process. However, this requires careful calculation and fair treatment of shareholders to avoid legal complications. The engagement of Computershare Trust Company, N.A. as the exchange and transfer agent is a crucial step in ensuring the process is managed accurately and efficiently.

Moreover, the company has to ensure that all communications and filings with the SEC surrounding the reverse stock split are transparent and provide shareholders with all the necessary information to understand the implications of the split. This includes the potential impact on the value of their holdings, the process for exchanging certificates and the treatment of fractional shares.

LAS VEGAS--(BUSINESS WIRE)-- Ault Alliance, Inc. (NYSE American: AULT), a diversified holding company (“Ault Alliance,” or the “Company”), announced today the voting results from the annual meeting of stockholders (the “Meeting”) held today, January 12, 2024. At the Meeting, the stockholders voted on three proposals, each of which is described in more detail in the Company’s definitive proxy statement (the “Proxy Statement”) previously filed with the U.S. Securities and Exchange Commission.

At the Meeting, stockholders voted upon and elected the seven director nominees named in the Proxy Statement and ratified the appointment of Marcum LLP as the Company’s independent registered public accounting firm. In addition, stockholders voted on and approved Proposal 6, approval of an amendment to the Company’s Certificate of Incorporation to effect a reverse stock split of the common stock (the “Common Stock”) by a ratio of not less than one-for-five and not more than one-for-twenty-five at any time prior to December 28, 2024, with the exact ratio to be set at a whole number within this range as determined by the Company’s board of directors (the “Board”) in its sole discretion. Three proposals were previously withdrawn by the Company. There were no other transactions of other business brought before the Meeting or any further adjournments or postponements thereof.

After the Meeting, the Board approved a one-for-twenty-five reverse stock split of the Common Stock that will be effective in the State of Delaware on January 16, 2024. The Company anticipates that beginning with the opening of trading on January 17, 2024, the Company’s Common Stock will trade on the NYSE American on a split-adjusted basis under a new CUSIP number, 09175M 507.

The reverse stock split affects all issued and outstanding shares of the Company’s Common Stock, as well as the number of shares of Common Stock available for issuance under the Company’s equity incentive plans. In addition, the reverse stock split reduces the number of shares of Common Stock issuable upon the exercise of stock options or warrants outstanding immediately prior to the reverse split. The par value of the Company’s Common Stock will remain unchanged at $0.001 per share after the reverse stock split. The reverse stock split affects all stockholders uniformly and will not alter any stockholder’s percentage interest in the Company’s equity, except to the extent that the reverse stock split results in some stockholders owning a fractional share. No fractional shares will be issued in connection with the reverse split. Stockholders who would otherwise be entitled to receive a fractional share will instead receive a cash payment.

Computershare Trust Company, N.A. (“Computershare”), is acting as the exchange agent and transfer agent for the reverse stock split. Computershare will provide instructions to stockholders with physical certificates regarding the optional process for exchanging their pre-split stock certificates for post-split stock certificates and receiving payment for any fractional shares.

For more information on Ault Alliance and its subsidiaries, Ault Alliance recommends that stockholders, investors, and any other interested parties read Ault Alliance’s public filings and press releases available under the Investor Relations section at www.Ault.com or 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 and 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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240112318437/en/

Ault Alliance Investor Contact:

IR@Ault.com or 1-888-753-2235

Source: Ault Alliance, Inc.

FAQ

What were the results of Ault Alliance's annual stockholders meeting?

The stockholders voted on three proposals, electing seven director nominees, ratifying the appointment of Marcum LLP as the Company's independent registered public accounting firm, and approving an amendment to the Company's Certificate of Incorporation to effect a reverse stock split of the common stock.

When will the reverse stock split be effective?

The reverse stock split will be effective in the State of Delaware on January 16, 2024.

How will the reverse stock split affect stockholders?

The reverse stock split affects all issued and outstanding shares of the Company's Common Stock, as well as the number of shares of Common Stock available for issuance under the Company's equity incentive plans.

What will happen to stockholders who would otherwise be entitled to receive a fractional share?

Stockholders who would otherwise be entitled to receive a fractional share will instead receive a cash payment.

Where can stockholders, investors, and interested parties find more information about Ault Alliance and its subsidiaries?

Ault Alliance recommends that stockholders, investors, and any other interested parties read Ault Alliance's public filings and press releases available under the Investor Relations section at www.Ault.com or at www.sec.gov.