The Company Reaffirms its Commitment to Focus on Its AI Data
Center Operations and Divest Remaining Assets
Ault Alliance, Inc. (NYSE American: AULT), a diversified holding
company (“Ault Alliance,” or the “Company”), reported
its financial results for the second quarter ended June 30, 2024,
which were disclosed on a quarterly report on Form 10-Q filed on
August 16, 2024, with the Securities and Exchange Commission. The
Company reported revenue of $76.3 million for the six months ended
June 30, 2024, and total assets of $271 million as of June 30,
2024. The Company also reaffirmed its previous announcement of its
intentions to reorganize the Company into two separate companies,
with Ault Alliance to concentrate on its artificial intelligence
(“AI”) data center space under its new name, Hyperscale
Data, Inc. (“Hyperscale Data”). As part of this
reorganization, Ault Alliance plans to issue one or more special
dividends to stockholders of stock in its subsidiaries that are not
related to the AI data center business. The Company believes that
this plan will ensure stockholders receive a direct benefit from
the distribution of the Company’s present assets that will no
longer be a part of the Company’s core focus.
Key financial highlights:
- Digital Assets Mining Revenue The Company’s digital
assets mining operations achieved a 27% increase in revenue, to
$19.9 million in the first half of 2024, compared to $15.7 million
in the prior year’s first half, showing resilience despite recent
challenges in the Bitcoin market, including the halving earlier
this year.
- Hotel and Real Estate Sectors The Company’s hotel and
commercial real estate holdings posted 23% revenue growth for the
first half of 2024, at $8.1 million, compared to $6.6 million in
the prior year’s first half, attributed to increased occupancy
after completing renovations in April 2023.
- Enertec’s Market Success Enertec Systems 2001 Ltd., the
Israeli subsidiary of Gresham Worldwide, Inc. (“GWW”), in the
Company’s defense segment, reported a notable 47% sales increase in
the first half of 2024, which helped GWW achieve a 16% overall
increase in revenue for the six months ended June 30, 2024,
highlighting significant market penetration in the defense
sector.
- TurnOnGreen, Inc. Exceptional Growth This subsidiary,
focused on electric vehicle charging, showed a 54% increase in
sales in the first half of 2024 compared to the prior year
period.
- Deconsolidation of The Singing Machine, Inc. (“SMC”) Due
to the significant change in the Company’s ownership, the Company
deconsolidated SMC as of November 20, 2023, resulting in a $6
million reduction in total sales.
- Enhanced Financial Efficiency Ault Alliance achieved a
$17 million reduction in G&A expenses in the first half of 2024
and a 59% decrease in interest expenses over the same timeframe,
reflecting an overall management concentration on managing the
Company’s expenses and debt management.
Strategic Company Split
Milton “Todd” Ault III, the Company’s Founder and Executive
Chairman remarked, “Our financial performance is complemented by a
strategic decision to split Ault Alliance into two distinct
entities. This move reflects our commitment to unlocking the true
value of our assets. On one hand, Hyperscale Data will concentrate
on AI data centers and Bitcoin operations - areas with immense
growth potential. This transition will be led by William B. Horne
and Jay Looney, positioning us at the forefront of the upcoming AI
data center market expansion. The second entity, Ault Capital
Group, Inc. (“ACG”), will be a specialized hybrid private
equity company. It is anticipated that the Company’s stockholders
will receive a special dividend comprising equity ownership in ACG,
which is expected to hold the Company’s assets that are not related
to its core focus of Hyperscale Data, including, but not limited
to, the Company’s equity ownership in:
- askROI, Inc.;
- Ault Lending, LLC;
- Ault Global Real Estate Equities, Inc.;
- BitNile.com, Inc.;
- Circle 8 Holdco LLC;
- Gresham Worldwide, Inc.;
- GuyCare, Inc.; and
- TurnOnGreen, Inc.
This strategic division not only is intended to allow each of
Hyperscale Data and ACG to focus on their core business, but also
maximizes stockholder value by concentrating resources on distinct
growth trajectories. As we previously announced, we intend to
change our name to Hyperscale Data, Inc. and our ticker symbol to
GPUS. This change is expected to occur in September 2024. Ault
Alliance reaffirms its dedication to transparently updating
stockholders on this transformative journey and its ongoing
financial performance through 2024.”
Ault Alliance notes that all estimates and other projections are
subject to the volatility in Bitcoin market price, the fluctuation
in the mining difficulty level, maintaining sufficient amount of
power to continuously mine Bitcoin at current levels, 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.
Please note that the terms of any special dividend, including
the timing of the issuance of any such dividends, are not provided
within this press release. Stockholders should refer to the
Company’s official announcements, as and when announced. Any such
special dividends will be subject to various regulatory
requirements and approvals, including but not limited to board
approval, NYSE American approval, NYSE American rules and
regulations, the potential requirement to file one or more
registration statements with the Securities and Exchange
Commission, the availability of requisite financing and market
conditions, among other matters. There are no assurances that the
Company will be able to obtain the necessary approvals or be able
to comply with the required corporate governance requirements. The
Company will provide further information as developments so
warrant.
This press release is for informational purposes only and
neither does nor shall constitute an offer to sell, nor the
solicitation of an offer to purchase, shares of the Company’s
common stock or any other securities of the Company. No
distribution will be made to any person in any jurisdiction in
which such offer, solicitation or sale is unlawful. Any
distribution of securities will be made only in compliance with all
applicable rules and regulations.
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. It also
provides mission-critical products that support a diverse range of
industries, including a social gaming platform, equipment rental
services, defense/aerospace, industrial, automotive,
medical/biopharma, hotel operations and textiles. In addition, Ault
Alliance is actively engaged in private credit and structured
finance 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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version on businesswire.com: https://www.businesswire.com/news/home/20240819309972/en/
Ault Alliance Investor Contact: IR@Ault.com or
1-888-753-2235
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