SCHEDULE: Ault Lending Boosts Universal Safety Stake to 11.1%

Ault Lending, LLC, an affiliate of Milton C. Ault, III, increased its beneficial ownership in Universal Safety Products, Inc. to 11.1% through a new stock purchase agreement and open market acquisitions.

Summary

• Ault Lending, LLC, an affiliate of Milton C. Ault, III, has increased its beneficial ownership in Universal Safety Products, Inc. to 257,457 shares, representing 11.1% of the outstanding common stock.
• Milton C. Ault, III, individually and through affiliated entities, now beneficially owns 323,657 shares, or approximately 13.7% of the Issuer's common stock.
• This includes 50,000 stock options for Mr. Ault and 25,000 stock options for Henry Carl Nisser, both directors, with a strike price of $3.40 per share, vested on October 20, 2025, and expiring on August 26, 2035.
• Ault Lending, LLC entered into a Stock Purchase Agreement on January 16, 2026, with JLA Realty Associates LLC to acquire a total of 300,000 shares at $6.00 per share for an aggregate of $1,800,000.
• The acquisition is structured in two closings: 95,000 shares were purchased at the first closing on January 16, 2026, for $570,000, and an additional 205,000 shares are to be purchased at a second closing for $1,230,000.
• Consideration for these purchases is in the form of promissory notes issued by Ault Lending, LLC to JLA Realty Associates LLC, accruing interest at 8% per annum and maturing in March 2026.
• JLA Realty Associates LLC agreed to exercise a Convertible Promissory Note, dated August 13, 2025, from SJC Lending, LLC (issued by Universal Safety Products, Inc.) for 205,000 shares to facilitate the second closing.
• Other open market purchases include 6,000 shares by Ault & Company, Inc. for $18,032.80, 10,000 shares by Alpha Structured Finance LP for $36,062.60, 162,457 shares by Ault Lending, LLC for $720,590.43, and 200 shares by Mr. Ault for $1,005.00.
• The aggregate percentage of shares beneficially owned by the Reporting Persons is based on 2,312,887 shares outstanding as of November 19, 2025.

Sentiment

Score: 6

Explanation: The increased stake by a prominent investor group (Ault-affiliated entities) can be seen as a vote of confidence or a precursor to strategic engagement, which is generally positive. However, the use of promissory notes for the acquisition and the 'Big Boy' clause, which acknowledges potential information asymmetry, introduce elements of caution and complexity. The filing primarily details ownership changes and transaction mechanics rather than operational performance, leading to a moderately positive but not overwhelmingly bullish sentiment.

Positives

• Increased beneficial ownership by a significant investor group, including Milton C. Ault, III, potentially signaling confidence in the Issuer's future.
• The acquisition of additional shares at $6.00 per share by Ault Lending, LLC, which is above the strike price of the director options ($3.40), suggests a perceived value in the Issuer's stock.
• The conversion of a convertible promissory note into equity reduces the Issuer's debt burden.

Negatives

• The 'Big Boy' clause in the Stock Purchase Agreement indicates that the seller (JLA Realty Associates LLC) acknowledges the buyer (Ault Lending, LLC) may possess material non-public information and waives claims related to non-disclosure, which could imply information asymmetry.
• Ault Lending, LLC is funding a significant portion of the share acquisition through promissory notes, introducing debt obligations for the buyer.

Risks

• The promissory notes issued by Ault Lending, LLC carry an 8% interest rate and mature in March 2026, posing a short-term financial obligation for the buyer.
• The 'Big Boy' clause highlights the potential for information asymmetry, where the seller may not have had access to all material information possessed by the buyer, although the seller explicitly waived claims related to non-disclosure (except for common-law fraud regarding express representations).
• The reliance on the conversion of a convertible promissory note for the second closing introduces a dependency on a third-party action (SJC Lending, LLC's conversion).

Future Outlook

The filing does not provide explicit forward-looking statements or guidance from Universal Safety Products, Inc. However, the increased beneficial ownership by Milton C. Ault, III and his affiliated entities suggests a continued strategic interest and potential for future influence on the Issuer's direction.

Industry Context

NA

Related Party Transactions

• Milton C. Ault, III, Executive Chairman of Hyperscale Data, Inc., CEO and Chief Investment Officer of Alpha Management, and Executive Chairman of Ault Capital, is also a director of Universal Safety Products, Inc. and beneficially owns shares and options.
• Henry Carl Nisser, a director of Universal Safety Products, Inc., was awarded stock options.
• The stock options awarded to Mr. Ault and Mr. Nisser are related party transactions due to their director roles.
• The conversion of the Convertible Promissory Note from SJC Lending, LLC (issued by Universal Safety Products, Inc.) is a transaction involving the Issuer's capital structure.

Stakeholder Impact

• Shareholders: Increased concentration of ownership by an investor group, potentially leading to greater influence on corporate strategy and governance.
• Creditors: The conversion of the convertible promissory note reduces the Issuer's debt, which could be positive for creditors.

Next Steps

• The second closing of the Stock Purchase Agreement, where Ault Lending, LLC will purchase an additional 205,000 shares from JLA Realty Associates LLC (or its designee) for $1,230,000, is scheduled for three business days after January 16, 2026.
• JLA Realty Associates LLC is obligated to exercise the Convertible Promissory Note from SJC Lending, LLC for 205,000 shares to facilitate the second closing.
• The promissory notes issued by Ault Lending, LLC are due to mature in March 2026.

Key Dates

Recommendation

The filing indicates a significant increase in beneficial ownership by Milton C. Ault, III and his affiliated entities, which can be interpreted as a vote of confidence and a potential precursor to strategic engagement. However, the use of promissory notes for the acquisition and the 'Big Boy' clause, which acknowledges potential information asymmetry, introduce elements of caution. While the increased insider stake is generally positive, the filing does not provide sufficient operational or financial performance data to warrant a 'buy' or 'sell' recommendation. A 'hold' position is prudent to observe the impact of this increased ownership and any subsequent strategic moves.

Keywords

Universal Safety Products, Ault Lending, Milton C. Ault, Schedule 13D, Beneficial Ownership, Stock Purchase Agreement, Equity Investment, Convertible Note, Insider Ownership, SEC Filing