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Wed. 15 Sep 2021, 3:47pm ETBenzinga
In: Cryptocurrency, News, Contracts, Markets

Ault Global Holdings, Inc. (NYSE:DPW) a diversified holding company (the "Company"), announced today that its wholly owned subsidiary, Ault Alliance, Inc. ("Ault Alliance"), has entered into a purchase agreement with Bitmain Technologies Limited ("Bitmain") for the purchase of 3,000 S19j Pro model Antminers (the "Antminers") for a total purchase price of $21 million and additional transaction costs of approximately $2 million in addition to the 1,000 Antminers the Company took delivery of earlier this week. The new Antminers will be deployed at the Company's Michigan data center (the "Data Center"). The deployment of the 3,000 Antminers is scheduled to occur monthly, generally coinciding with the delivery schedule of 300 units per month, between October 2021 and July 2022.

Alliance Cloud Services, LLC, a majority owned subsidiary of Ault Alliance, acquired the Data Center, a 617,000 square foot energy-efficient facility located on a 34.5-acre site, in January 2021. During June 2021, the Company announced its intent to expand the infrastructure of its Data Center and increase the power capacity to 28MWs. With the execution of this purchase agreement with Bitmain and the delivery of the 1,000 Antminers, the Company is well-positioned to increase the scale and scope of its cryptocurrency and data center operations and is now moving forward with the necessary upgrades to achieve maximum capacity at the Data Center. The upgrades are projected to take approximately 18 months and are expected to result in 300MWs of critical power under an energy abatement agreement with fixed pricing at relatively low energy rates for the next five years.

Based on the current market conditions related to bitcoin mining and assuming the installation of all 4,000 Antminers which is expected to be completed in July 2022, the Company anticipates the gross revenue from its cryptocurrency mining operations to reach an annual run rate of between $45 and $50 million. In August 2021, the Company formed a new wholly owned subsidiary, BitNile, Inc. ("BitNile"), which will hold the Company's investment in the Data Center and Antminers. While the Company believes that the future operations of the Data Center and its cryptocurrency mining operations will be successful, the Company cannot assure you that its expectations will materialize in a timely manner, if at all.

Milton "Todd" Ault, III, the Company's Executive Chairman, stated, "I'm thrilled with the progress achieved so far and am confident, particularly having purchased an additional 3,000 Antminers, that BitNile's operations will contribute meaningfully to the Company's growth in both revenues and profitability." Ault continued, "We believe BitNile's long-term success and ability to scale will be partially dependent on access to the private or public equity markets to fund additional investments in Antminers and the Data Center expansion."

For more information on Ault Global Holdings and its subsidiaries, the Company recommends that stockholders, investors and any other interested parties read the Company's public filings and press releases available under the Investor Relations section at www.AultGlobal.com or available at www.sec.gov.