Ault Alliance Issues Letter to Stockholders

Rhea-AI Summary

Ault Alliance, Inc. (NYSE American: AULT) announces strategic reorganization into two key entities, Sentinum and Ault Capital Group, with a focus on AI, data processing, and investment management. The Michigan data center boasts a current capacity of approximately 28 megawatts of energy-efficient power, with potential to reach approximately 300MWs over the next five years. The new Montana facility is expected to initially add an incremental 10MWs and has current capacity of approximately 20MWs. The company plans to relocate bitcoin miners to the Montana site to optimize operations and profitability. Ault Alliance believes that both Sentinum and Ault Capital Group have the potential to exceed a billion-dollar valuation within the next 60 months.

Insights

Market Research Analyst

The restructuring of Ault Alliance into two key entities, Sentinum and Ault Capital Group, signals a strategic shift with potential implications for the company's market positioning and investor appeal. The move to focus Sentinum on AI and data processing, while leveraging Ault Capital Group as the investment arm, could streamline operations and foster growth in specialized sectors. The expansion of Sentinum's data center capabilities, particularly the potential increase to 300MWs, is noteworthy as it indicates an aggressive growth strategy in the data center industry, which is experiencing burgeoning demand due to the proliferation of AI technologies and big data analytics.

Furthermore, the relocation of bitcoin miners to a lower-cost power facility in Montana is a strategic decision that reflects the company's adaptability to optimize operational costs in the volatile cryptocurrency mining market. This could improve Sentinum's profitability and provide a more stable financial outlook, which is crucial for investor confidence. However, the company's acknowledgment of the volatility in Bitcoin market price and mining difficulty level is a reminder of the inherent risks associated with this sector. Investors should consider these factors when evaluating the company's future performance.

Financial Analyst

The executive chairman's communication highlights the company's billion-dollar valuation aspirations for both Sentinum and Ault Capital Group within the next 60 months. This ambitious projection is based on the company's strategic planning and perceived intrinsic value of its ventures. While such optimism may be enticing to investors, it is essential to scrutinize the feasibility of these projections, considering the current market conditions and the company’s past performance. The need for additional financial resources to expand Sentinum's capacity could imply forthcoming capital-raising activities, which might dilute existing shareholder value or add debt to the company's balance sheet.

Investors should also be aware of the potential impact of the company's trading activities on reported earnings. The volatility caused by both realized and unrealized gains or losses can significantly affect the company's financial results, making it challenging to gauge the company's operational performance. This volatility should be factored into any investment analysis, as it could influence the stock's price movements and overall market perception of the company.

Legal Expert

The company's forward-looking statements regarding its valuation goals and expansion plans must be viewed within the context of regulatory disclosures and market conditions. The cautionary note about the estimates and projections being subject to various factors, including Bitcoin market price volatility and mining difficulty levels, is a standard disclaimer that underscores the uncertainties involved. While not directly impacting the legal standing of the company, these statements are crucial for compliance with securities regulations that mandate transparency about the risks involved in such forward-looking information.

Investors should be cognizant of the fact that the company's public filings and press releases, as recommended by the company for further information, are key resources for understanding the company's legal and regulatory environment. These documents can provide insights into the company's compliance with SEC regulations, any ongoing litigations, or potential legal challenges that could influence its operations and, consequently, its stock performance.

LAS VEGAS--(BUSINESS WIRE)-- Ault Alliance, Inc. (NYSE American: AULT), a diversified holding company (“Ault Alliance,” or the “Company”), today issued a letter from its Executive Chairman to its valued stockholders.

Dear Stockholders:

As Executive Chairman of the Company, I wish to share the latest updates and insights into the Company’s strategic direction, and to address the current perception of the Company’s value and potential.

1. Strategic Reorganization into Two Key Entities

I am thrilled to announce that we plan to reorganize our Company into two primary holding subsidiaries:

Sentinum

Sentinum, Inc. (‘Sentinum”). This data center business is at the forefront of our ventures into the emerging field of artificial intelligence (“AI”) and data processing. Sentinum offers colocation and hosting services for emerging AI ecosystems facilitated through its subsidiary, Alliance Cloud Services, LLC from its Michigan facility. The Michigan data center utilizes approximately 100,000 square feet within a 617,000 square foot building on a 34.5-acre site in southern Michigan. The data center, which is strategically positioned near power production sites, boasts a current capacity of approximately 28 megawatts (“MWs”) of energy-efficient power, and has the potential, subject to raising sufficient capital, to reach approximately 300MWs over the next five years.

In addition, Sentinum’s new facility in Montana, which is on track to become operational in March 2024, is expected to initially add an incremental 10MWs and has current capacity of approximately 20MWs. Sentinum believes that the capacity of the Montana sites can be significantly expanded and has contracted with the local utility to begin an electrical load study in order to better understand the opportunities for power upgrades at its Montana sites. Pending the results of the study, Sentinum would also require additional financial resources in order to increase the capacity.

This expansion is a testament to the commitment to leveraging the latest technology, while positioning the Company for financial growth through incremental capacity and resources. We plan to relocate bitcoin miners to the Montana site, taking advantage of lower cost power facilities, which is a significant step in optimizing our operations. This move offers Sentinum enhanced operational flexibility. We can either transfer machines from our Michigan data center, thereby freeing up power for more profitable AI data center operations, or we can relocate machines currently engaged in third-party hosting agreements. Whichever path we choose, it is poised to substantially improve Sentinum’s profitability, reinforcing our commitment to growth and operational efficiency.

Furthermore, Sentinum, on the back of this transition towards a self-sustaining data center model, will evaluate new opportunities for additional acquisitions to bolster its power capabilities and overall footprint within the data center and AI space. I believe in the exceptional potential of Sentinum as a cornerstone in our strategy to lead in the technology and AI space.

Ault Capital Group

Ault Capital Group, Inc. (“Ault Capital Group”). Operating principally as our investment arm, this entity will manage all other investments, including our investment in Circle 8 Cranes Services, LLC. Ault Capital Group will look to leverage the collective strengths of our diverse portfolio, driving innovation and value across the board.

2. Recognizing the Full Potential of Ault Alliance

Despite our strategic advancements, I sense a vast underappreciation in the market for what Ault Alliance truly represents. This communication is a reaffirmation of the untapped opportunities within our restructured organization.

3. Billion-Dollar Aspirations in Our Evolved Portfolio

With the restructuring, we believe that both Sentinum and Ault Capital Group have great potential on their own, with each having the potential to exceed a billion-dollar valuation within the next 60 months. My confidence in these projections is based on detailed strategic planning and a deep understanding of the intrinsic value these ventures offer.

4. Your Role in Our Shared Vision

As we embark on this journey, the role of our stockholders has never been more crucial. Your continued support and belief in our vision are vital for turning our aspirations into reality and propelling Ault Alliance into an era of unprecedented success and innovation.

In conclusion, our focus remains on sustainable, significant growth, transcending immediate outcomes. As Executive Chairman, I am fully committed to leading Ault Alliance through this exciting phase of transformation and growth.

Thank you for your unwavering trust and commitment to our shared future.

Regards,

Milton “Todd” Ault, III
Executive Chairman

Ault Alliance reminds you that its estimates and projections are subject to the volatility in Bitcoin market price, the fluctuation in the mining difficulty level, the ability to build out and provide the necessary power for miners, and other factors that may impact the results of Bitcoin mining production or operations. The Company’s trading activities, encompassing both realized and unrealized gains or losses, can cause notable volatility in its reported earnings.

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/20240131239693/en/

Ault Alliance Investor Contact:

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

Source: Ault Alliance, Inc.

FAQ

What is the ticker symbol for Ault Alliance, Inc.?

The ticker symbol for Ault Alliance, Inc. is AULT.

What are the two primary holding subsidiaries of Ault Alliance?

The two primary holding subsidiaries of Ault Alliance are Sentinum and Ault Capital Group.

What is the current capacity of the Michigan data center?

The Michigan data center boasts a current capacity of approximately 28 megawatts of energy-efficient power.

What is the expected capacity of the Montana facility?

The new Montana facility is expected to initially add an incremental 10MWs and has current capacity of approximately 20MWs.

What does Ault Alliance plan to relocate to the Montana site?

Ault Alliance plans to relocate bitcoin miners to the Montana site to optimize operations and profitability.

What is the potential valuation of Sentinum and Ault Capital Group within the next 60 months?

Ault Alliance believes that both Sentinum and Ault Capital Group have the potential to exceed a billion-dollar valuation within the next 60 months.