Ault Alliance plans to offer to swap common stock for preferreds

By Marisa Wong

Los Angeles, March 21 – Ault Alliance, Inc. announced it intends to launch an offer to exchange up to 333,333,333 shares of its common stock for up to 5 million shares of preferred stock with a stated value of $10.00 per share.

The company said this initiative is designed to enhance its capital structure and stockholder value by enabling the stockholders to receive a security more aligned with the underlying value of the company. If all 333,333,333 shares of common stock are tendered and retired, the company’s outstanding common stock would be reduced by about 80%.

The terms of the preferred stock equate to a value of $0.15 per share of each common stock exchanged, representing a 66.67% premium to the closing share price of $0.09 per share on March 17 on a per share of common stock equivalent basis, according to a press release.

The exchange offer will require that a minimum of 150 million shares of common stock be tendered by common stockholders. To avoid issuing fractional shares, the exchange offer will be structured in increments of 200 shares of common stock such that every 200 common shares is exchangeable into three preferred shares.

The preferred stock will be entitled to receive an annual dividend of 10%, payable in the form of cash or common stock. Dividends will be based on the 10-day volume-weighted average closing bid price immediately prior to the record date for such dividend payment.

The preferred stock is perpetual but will be callable in whole or in part at par of $10.00 plus dividends beginning two years from issuance and upon a change of control.

The preferred stock will not be convertible into common stock, carry voting rights other than as required by applicable law or provide for preemptive rights.

Holders of the preferred stock would be entitled to receive dividends of the company’s majority owned subsidiaries Imperalis Holding Corp. (sometimes referred to as TurnOnGreen) and Giga-tronics Inc. based on the number of common shares exchanged for preferreds, ensuring that common stockholders who exchange their shares will have the ability to participate in the distribution of those shares.

The exchange offer is expected to start in March, subject to regulatory approval and other customary closing conditions.

The company will seek to list the preferred stock on the NYSE American. If the application is not approved, the company intends to file an application to admit the preferred stock for trading on the OTC.

Ault Alliance is a Las Vegas-based diversified holding company pursuing growth by acquiring undervalued businesses and disruptive technologies with a global impact.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.