Hyperscale Data, Inc. (NYSE American:GPUS), a company specializing in electronic components, announced on Friday a significant private equity sale. The Delaware-based organization, formerly known as Ault Alliance, Inc., BitNile Holdings, Inc., and Ault Global Holdings, Inc., entered into a Material Definitive Agreement and completed unregistered sales of equity securities.
On November 6, 2023, Hyperscale Data entered into a Securities Purchase Agreement with Ault & Company, Inc., an affiliated Delaware corporation. Under the Agreement, Hyperscale Data issued 95 shares of Series C convertible preferred stock and corresponding warrants to purchase 28,086 shares of common stock for $95,000. This transaction was followed by another on Friday, with the sale of 735 shares of Series C Convertible Preferred Stock and warrants for 217,295 common shares, totaling $730,000.
To date, the Purchaser has acquired an aggregate of 46,530 shares of Series C Convertible Preferred Stock and warrants to purchase 13,756,099 common shares, representing a total investment of $46.53 million. The Agreement allows for up to $75 million of Series C Convertible Preferred Stock and Series C Warrants to be purchased in one or more closings.
The Series C Convertible Preferred Stock and the Series C Warrants were sold in reliance upon an exemption from the registration requirements under Section 4(a)(2) of the Securities Act of 1933, indicating that the sale was made to an accredited investor. This strategic financial maneuver aims to strengthen Hyperscale Data's capital structure and provide the company with additional resources for its operations and potential expansion.
The details of the Agreement, Series C Convertible Preferred Stock, and Series C Warrants were initially disclosed in a Form 8-K filed with the Securities and Exchange Commission on November 7, 2023. This recent filing continues to underscore Hyperscale Data's efforts to secure financing through equity sales to affiliated parties.
Hyperscale Data's business address is located at 11411 Southern Highlands Parkway, Suite 240, Las Vegas, NV 89141, and the company's telephone number is (949) 444-5464. This news is based on a press release statement.
In other recent news, Hyperscale Data, Inc. secured an additional $45.7 million investment through the sale of Series C Convertible Preferred Stock and Series C Warrants to Ault & Company, Inc. The funding will support the firm's ongoing development in the electronic components sector. This is part of a larger arrangement, allowing for the purchase of up to $75 million of Series C Convertible Preferred Stock and accompanying warrants.
In parallel, Hyperscale Data has entered into an agreement to sell a real estate property in St. Petersburg, Florida for $13.2 million, with $11 million of the purchase price to be deposited into an account for the benefit of its senior secured lenders.
The company is also focusing on enhancing its data center operations, specifically its artificial intelligence (AI) data center in Michigan. Plans are underway to increase the facility's capacity from approximately 30 megawatts to 300 megawatts, contingent on necessary regulatory approvals and financing.
Furthermore, Hyperscale Data's shareholders have approved the conversion of a 10% OID Convertible Promissory Note into common stock. This aligns with the company's recent rebranding and its strategic shift towards data center operations. Goldman Sachs suggests that AI could drive a 160% surge in data center power demand, aligning with Hyperscale Data's expansion plans.
InvestingPro Insights
Hyperscale Data's recent private equity sale to Ault & Company reflects the company's urgent need for capital, which is further illuminated by InvestingPro data. The company's market cap stands at a modest $7.26 million, while its revenue for the last twelve months as of Q2 2024 was $154.19 million. However, this comes with a significant operating loss of $63.06 million over the same period.
InvestingPro Tips highlight that Hyperscale Data "operates with a significant debt burden" and is "quickly burning through cash." These factors likely contributed to the company's decision to raise capital through the private sale of preferred stock and warrants. The tip that the company "may have trouble making interest payments on debt" underscores the urgency of their financial situation.
The stock's performance has been particularly concerning, with InvestingPro data showing a year-to-date price total return of -91.83% as of the latest available data. This aligns with the InvestingPro Tip that the "stock has taken a big hit over the last six months."
For investors considering Hyperscale Data, it's worth noting that InvestingPro offers 14 additional tips that could provide further insights into the company's financial health and market position. These additional tips could be valuable for understanding the full context of Hyperscale Data's recent equity sale and its implications for the company's future.
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