According to a press release from the holding company, it will sell up to $50 million in shares of Series C Convertible Preferred Stock to Ault & Company. Each of the preferred shares has a value of $1,000 and can be converted to shares of AULT stock with shareholder approval.
In addition to this, Ault & Company will gain warrants for up to 370 million shares of AULT stock with the conversion of its preferred shares. These warrants are exercisable for five years at a price of $0.1353 per share.
Ault Alliance also notes it already has a plan for the funds gained from this securities offering. The company will use the money to pay down debts, expand its Bitcoin (BTC-USD) mining facilities and for general working capital purposes.
Milton Ault III, Executive Chairman of Ault Alliance and Chairman and CEO of Ault & Company, said the following about the funding deal:
“That A&C is willing to invest up to $50 million on those terms should be a clear indicator of our belief that the market has been undervaluing the Company, which I’ve been highlighting for years. This transaction is more than a number—it’s a declaration of my steadfast confidence in our data centers, the crane company, the lending firm, and the exceptional portfolio companies we’ve nurtured over the past six years.”
AULT Stock Movement on Tuesday
With news of the funding deal comes AULT stock gaining 11.2% as of Tuesday morning. It also brings with it heavy trading of the company’s stock as some 21 million shares change hands. For the record, the daily average trading volume for AULT is about 6.9 million shares.
Investors keeping track of all the hottest stock market news today are in luck!
We’re offering insight into all of the biggest stock market stories worth reading about on Tuesday! A few examples include what’s happening with shares of Peloton (NASDAQ:PTON), WeWork (NYSE:WE) and Alto Ingredients (NASDAQ:ALTO) stock today. You can catch up on this news down below!
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On the date of publication, William White did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.