LAS VEGAS - Ault Alliance, Inc. (NYSE American: AULT), a diverse holding company, announced on Monday that its affiliate, Ault & Company, Inc., has invested $44.0 million in the company. This investment is part of an agreement that could see Ault & Company invest up to $75 million.
The investment, made under a Securities Purchase Agreement dated November 6, 2023, involves the acquisition of 44,000 shares of Series C convertible preferred stock and warrants to purchase roughly 13 million shares of Ault Alliance. The agreement allows for multiple closings, indicating the potential for additional investments.
Milton "Todd" Ault III, Executive Chairman of Ault Alliance and CEO of Ault & Company, expressed high confidence in the growth trajectory of Ault Alliance. He emphasized the significance of this capital infusion in strengthening the company's balance sheet and propelling strategic initiatives. Ault highlighted the company's progress, from less than $8 million in annual sales in 2017 to a projected annual revenue exceeding $200 million for the current fiscal year.
The funds are expected to support Ault Alliance's core businesses, including Sentinum data centers, Circle 8 crane rentals, and various investing and lending activities. Ault expressed optimism about the growth prospects of the Sentinum business, particularly with the rising demand for power in artificial intelligence data centers.
This partnership is seen as a step towards advancing Ault Alliance's business sectors and creating enhanced value for stockholders. The company operates in several industries, including data center operations, Bitcoin mining, and artificial intelligence. The company also offers products and services across diverse sectors like defense, automotive, and medical.
The information in this article is based on a press release statement from Ault Alliance, Inc.
InvestingPro Insights
Ault Alliance, Inc. (NYSE American: AULT) has been navigating a challenging financial landscape, as evidenced by the real-time metrics and InvestingPro Tips available for the company. With a market capitalization of just $7.28 million, the company is relatively small in size, which can often lead to higher volatility in stock prices. This is reflected in the company's recent performance, with a 1-week price total return of -26.57% and a staggering 1-year price total return of -99.96%, highlighting the significant decline in investor confidence over the past year.
The company has also been grappling with profitability issues, as indicated by the negative P/E ratio of -0.05 for the last twelve months as of Q4 2023. This suggests that Ault Alliance has not been generating net earnings in the recent period, which could be a concern for potential investors. Additionally, the company's Price / Book multiple of 0.16 implies that the stock is currently trading at a low valuation relative to its book value, which can be seen as a potential area of opportunity for value investors, according to one of the InvestingPro Tips.
InvestingPro Tips further reveal that Ault Alliance operates with a significant debt burden and may have trouble making interest payments on its debt. This is a critical consideration for investors, as it can impact the company's financial stability and growth prospects. With the company not paying dividends to shareholders, the focus for investors would likely be on capital gains, which have been elusive in recent times.
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