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On Monday, Ault Alliance, Inc., a company specializing in electronic components, announced the approval of a key financial maneuver by its shareholders. At a Special Meeting held on the same day, shareholders voted in favor of converting a 10% OID Convertible Promissory Note into common stock.
The note, with a principal amount of $5,390,000, was issued as part of a Note Purchase Agreement dated July 18, 2024. This move, sanctioned under Rule 713(a) of the NYSE American, received significant support with 16,626,682 votes for the conversion, 2,541,216 against, and 46,470 abstentions. No broker non-votes were recorded.
The vote took place with an eligible voting base comprising 38,846,318 shares of Class A common stock and 44,300 shares of Series C Preferred Convertible Stock. These figures represent the total outstanding voting capital stock of the company as of the record date, August 5, 2024.
The approval by the stockholders is a significant step in the company's financial strategy, allowing Ault Alliance to convert debt into equity, a move that can potentially influence the company's capital structure and shareholder value.
Ault Alliance, formerly known as BitNile Holdings, Inc., Ault Global Holdings, Inc., and DPW Holdings, Inc., has undergone several name changes in recent years, with the latest occurring on December 13, 2021. The company is headquartered in Las Vegas, Nevada, and is incorporated in Delaware.
The company's common stock, with a par value of $0.001, is traded on the NYSE American under the ticker symbol AULT. Additionally, its 13.00% Series D Cumulative Redeemable Perpetual Preferred Stock, also with a par value of $0.001 per share, is listed under the ticker AULT PRD.
InvestingPro Insights
As Ault Alliance, Inc. navigates through its financial restructuring by converting debt into equity, it's crucial for investors to keep an eye on the company's financial health and market performance. According to real-time data from InvestingPro, Ault Alliance has a market capitalization of $9.03 million and is trading at a low Price / Book multiple of 0.34, which could suggest that the company's assets are potentially undervalued. Despite a slight increase in revenue growth over the last twelve months, by 0.56%, the company's financials show signs of distress, with a significant operating income loss of $63.06 million and a negative return on assets of -53.31%. Additionally, the stock has experienced a substantial decline in price total returns, with a -99.29% return over the last year.
InvestingPro Tips highlight several challenges facing Ault Alliance. The company operates with a significant debt burden and may have trouble making interest payments on its debt, which is particularly concerning given its recent financial maneuver. Moreover, the stock's performance has been quite volatile, with significant price drops over various time frames, including a -7.51% return over the last week and a -25.84% return over the last month. For investors seeking a more comprehensive analysis, InvestingPro offers additional tips on Ault Alliance, which can be found at https://www.investing.com/pro/AULT.
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