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2018–2021: The Avalanche International Transactions

The conduct that would ultimately produce a federal enforcement action was already underway. According to the SEC's 2023 administrative order (Release No. 33‑11222), from 2016 through 2021 Ault Alliance loaned approximately $17.8 million to Avalanche International, Inc., a related party that Ault controlled. The SEC alleged that during this period Avalanche "had little to no revenues, insufficient funds to pay its expenses, and relied on AAI's loans for its operating cash flows."

Two specific disclosure failures sit at the center of the SEC's case. First, in 2018 and 2019, the agency alleged that Ault Alliance and Ault personally made materially false and misleading statements about a $50 million purchase order that Ault Alliance said it had received from Avalanche — a related party whose ability to ever pay was, on the SEC's account, fundamentally dependent on Ault Alliance's own loans back to it. Second, the SEC alleged that in 2019, Ault and CFO William Horne caused Ault Alliance to record a $75,000 payment to an individual as "consulting services" when, according to the order, it was actually used to extinguish a personal debt owed by Ault.

The SEC also cited long-running internal-control weaknesses dating back to June 2017, missed related-person disclosures across 2016–2021, and improper accounting on Avalanche warrant investments in fiscal years 2018–2021.

2023: SEC Settlement — Roughly $956,000 Across the Defendants

On August 9, 2023, the Commission announced settled administrative charges. Without admitting or denying the findings, Ault Alliance agreed to a $700,000 civil penalty; Ault personally agreed to a $150,000 civil penalty plus $75,000 disgorgement and $10,504 in prejudgment interest; current CEO Horne agreed to a $20,720 penalty for record-keeping and internal-control violations. Bloomberg Law tabulated the combined recovery at $956,000.

For context, that is a comparatively modest financial sanction. But the SEC's order is now part of the permanent public record, and it is one of the few documents in this story that contains formal regulator findings — not allegations — even though Ault did not admit them.

2023–2025: Bankruptcy of Subsidiaries, Lawsuits From Lenders, Reverse Splits, and Another Rebrand

The corporate vehicle has continued its evolution. The public parent has cycled through names — Digital Power Corporation, DPW Holdings, Ault Global Holdings, BitNile Holdings, Ault Alliance — and on September 10, 2024, rebranded again, this time to Hyperscale Data, Inc., trading under the ticker GPUS. Subsidiaries pursued Bitcoin mining, then AI/GPU data-center hosting, with operations announced in Michigan and elsewhere.

The litigation kept arriving. Briebug Software, Inc. v. Ault Alliance, Inc. (S.D.N.Y., 1:23‑cv‑04369) was filed in 2023. Arena Investors, LP v. Ault Alliance, Inc. (2025 NY Slip Op 30248(U)) reached the New York courts in 2025. Public records show a string of supplier and counterparty disputes — the kind that pile up around a company perpetually short of cash.

Cash was indeed perpetually short. Hyperscale Data executed a 1‑for‑35 reverse stock split effective November 22, 2024, collapsing roughly 38.8 million shares into about 1.1 million. By 2025 the company was again seeking shareholder authority for another reverse split, an authorization to issue up to 2.5 billion shares, and the ability to sell up to $100 million in a new Series H preferred stock. Macroaxis at one point pegged the company's "Probability of Bankruptcy" metric — a model output, not a filing — at 96%.