Ault Alliance Returns to Treasury Common and Preferred Stock, Enhancing Financial Stability

Rhea-AI Summary

Ault Alliance, Inc. (NYSE American: AULT) has returned 101,362 shares of its 13% Series D cumulative redeemable perpetual preferred stock and 679,969 shares of its common stock to treasury. This reduces the annual dividend payable by $0.3 million and bolsters the financial health of the Company. The retirement of the Preferred Shares benefits all stockholders, reducing the outstanding capital stock. Additionally, the Company's subsidiary, Sentinum, Inc., achieved the highest single monthly run rate from Bitcoin mining operations, showing a commitment to enhancing financial stability and anticipating further achievements in 2024.

Insights

Financial Analyst

The retirement of Ault Alliance's Preferred Shares is a strategic financial maneuver that directly impacts the company's balance sheet. By reducing the annual dividend obligation by $0.3 million, the company is effectively lowering its fixed cash outflows, which can improve net income and potentially enhance shareholder value. The action of returning shares to treasury is a signal that the company is managing its capital structure proactively. Given that the Preferred Shares accounted for nearly a quarter of that series, the reduction is substantial and may be viewed favorably by the market as it indicates a more robust financial position.

Furthermore, the announcement of the highest monthly run rate from Bitcoin mining operations suggests that the company's subsidiary, Sentinum, is capitalizing on the current market conditions in the cryptocurrency space. However, it's crucial to note that Bitcoin mining profitability is highly sensitive to Bitcoin prices and mining difficulty levels, both of which are volatile. Investors should consider the inherent risks associated with the cryptocurrency industry, including regulatory challenges and market volatility.

Market Research Analyst

The strategic relocation of approximately 6,500 mining rigs to Sentinum's self-managed Montana facility is indicative of Ault Alliance's efforts to optimize operational efficiency. This move could potentially lower operational costs and improve the profitability of the company's Bitcoin mining operations. It is important for stakeholders to monitor the execution of this relocation and the subsequent operational performance, as it could have significant implications for the company's revenue and cost structure in the competitive landscape of cryptocurrency mining.

In the context of the broader market, Ault Alliance's focus on operational efficiency and financial stability may position the company favorably against competitors. However, the success of such initiatives will largely depend on the company's ability to adapt to the rapidly changing technological and regulatory environment of the cryptocurrency market.

Economist

The reduction in preferred dividends payable by Ault Alliance can be interpreted as a measure to strengthen the company's financial flexibility, particularly in the face of economic uncertainties. This increased flexibility may provide the company with more resources to invest in growth opportunities or to weather potential economic downturns. It's also indicative of a broader trend where companies are seeking to optimize their capital allocation in response to the dynamic economic landscape.

Moreover, the performance of Sentinum's Bitcoin mining operations and the anticipated achievements in 2024 should be evaluated against the backdrop of the economic factors influencing the cryptocurrency market, including interest rates, inflation and technological advancements. These factors can affect both the demand for Bitcoin and the cost of mining, which in turn impacts the profitability of operations like those of Sentinum.

LAS VEGAS--(BUSINESS WIRE)-- Ault Alliance, Inc. (NYSE American: AULT), a diversified holding company (“Ault Alliance,” or the “Company”), today announced that it has returned to treasury 101,362 shares of its 13% Series D cumulative redeemable perpetual preferred stock, which have a stated value of $2.5 million (the “Preferred Shares”) and 679,969 shares of its common stock (collectively with the Preferred Shares, the “Shares”). The retirement of the Preferred Shares reduces the Company’s annual dividend payable by $0.3 million. The Shares were recently acquired by the Company’s wholly owned subsidiary, Ault Lending, LLC, upon the liquidation of a related party hedge fund.

Milton “Todd” Ault III, the Company’s Executive Chairman, stated, “The return to treasury of the Shares is a benefit to all stockholders, reducing the Company’s outstanding capital stock. The Preferred Shares represented nearly 24% of the outstanding shares of that series of preferred stock, and the significant reduction in preferred dividends payable bolsters the financial health of the Company going forward. Additionally, the recently announced highest single monthly run rate from Bitcoin mining operations of the Company’s wholly owned subsidiary Sentinum, Inc. (“Sentinum”) is a direct result of our focused and efficient operational strategies and our commitment to enhancing the Company’s financial stability. Looking ahead, we anticipate even more achievements in 2024 for Sentinum, driven by the favorable Bitcoin market trends and the planned strategic relocation of approximately 6,500 of our mining rigs to Sentinum’s self-managed Montana facility.”

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 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 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/20240109281007/en/

Ault Alliance Investor Contact:

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

Source: Ault Alliance, Inc.

FAQ

What did Ault Alliance, Inc. (AULT) announce in the press release?

Ault Alliance, Inc. (AULT) announced the return to treasury of 101,362 shares of its 13% Series D cumulative redeemable perpetual preferred stock and 679,969 shares of its common stock, reducing the annual dividend payable by $0.3 million.

How does the retirement of the Preferred Shares benefit the stockholders?

The retirement of the Preferred Shares reduces the outstanding capital stock, benefitting all stockholders.

What achievement did the Company's subsidiary, Sentinum, Inc., recently accomplish?

Sentinum, Inc. achieved the highest single monthly run rate from Bitcoin mining operations, demonstrating a commitment to enhancing financial stability and anticipating further achievements in 2024.

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

Stockholders, investors, and other interested parties can find more information about Ault Alliance and its subsidiaries in the Investor Relations section at www.Ault.com or at www.sec.gov.