Hyperscale Data, Inc. (NYSE American: GPUS), a diversified
holding company (“
Hyperscale Data” or the
“
Company”), announced today that it has entered
into a Securities Purchase Agreement (the
“
Agreement”) providing for up to $25 million of
financing (the “
Financing”) from Ault &
Company, Inc., a related party (“
A&C”).
Pursuant to the Agreement, Hyperscale Data has agreed to issue and
sell to A&C up to $25 million in shares of Series G Convertible
Preferred Stock (the “
Preferred Shares”). The
Preferred Shares will be senior to all other classes of preferred
stock the Company has outstanding except with respect to the Series
C Convertible Preferred Stock (the “
Series C Preferred
Stock”), with which it ranks in parity, as well as senior
to the Company’s Class A common stock (“
Common
Stock”).
Each Preferred Share shall have a stated value
of $1,000.00 per share and, upon stockholder approval, shall be
convertible at the holder’s option into shares of Common Stock at a
conversion price equal to the greater of (i) $0.10 per share (the
“Floor Price”), which Floor Price shall not,
except for voting rights purposes, be adjusted for stock dividends,
stock splits, stock combinations and other similar transactions and
(ii) the lesser of (A) $6.74, or (B) a 5% premium to the closing
sale price of the Common stock on the day immediately prior to the
date of conversion (the “Conversion Price”). The
Conversion Price will be subject to standard anti-dilution
provisions in connection with any stock split, stock dividend,
subdivision or similar reclassification of the Common Stock. The
Preferred Stock also has “full ratchet” price protection in the
event the Company should issue securities at a lower price than the
Conversion Price. The Preferred Stock shall pay a dividend at an
annual rate of 9.5%, which the Company may, during the first two
years, pay in shares of Common Stock.
Further, A&C will receive warrants
(“Warrants”) to purchase up to approximately 4.25
million shares of Common Stock, presuming that the full amount of
the Preferred Shares is sold, exercisable for five years at $5.92
per share, subject to adjustment.
The proceeds from the Financing will be used for
expansion of the MI data center to support infrastructure upgrades
necessary to support the growing demands of high-performance
computing services powering Artificial Intelligence solutions,
repayment of outstanding indebtedness and general working capital
purposes.
"The conversion price of the Preferred Shares is
nearly a 25% premium over the current market price. That A&C is
willing to invest an additional up to $25 million, beyond the $75
million in shares of a virtually identical series of preferred
stock, the Series C Preferred Stock of which it has already
purchased approximately $50 million, on those terms should be a
clear indicator of our belief that the market has been undervaluing
the Company, which I've been highlighting for years. This
transaction is more than a number—it’s a declaration of my
steadfast confidence in our data centers, the crane company, the
lending firm, and the exceptional portfolio companies we've
nurtured over the past seven years. Each is a vital component of
our collective success," said Milton "Todd" Ault III, Executive
Chairman of Hyperscale Data and Chairman & CEO of A&C.
The Agreement provides for several closings
through December 31, 2025, though such dates may be extended by
A&C as set forth in the Agreement. The consummation of the
transactions contemplated by the Agreement, specifically the
conversion of the Preferred Shares and the exercise of the Warrants
in an aggregate number in excess of 19.99% on the execution date of
the Agreement, are subject to various customary closing conditions
as well as regulatory and stockholder approval. In addition to
customary closing conditions, the closing of the Financing is also
conditioned upon the receipt by A&C of financing to consummate
the transaction.
Additional information regarding the securities
described above and the terms of the Financing will be included in
a Current Report on Form 8-K to be filed with the United States
Securities and Exchange Commission (“SEC”).
The Preferred Shares and Warrants will be issued
in reliance upon the exemption from the securities registration
afforded by Section 4(a)(2) of the Securities Act of 1933, as
amended (the “Securities Act”) as promulgated by
SEC under the Securities Act.
This press release does not constitute an offer
to sell or the solicitation of an offer to buy the securities, nor
will there be any sale of the securities in any jurisdiction in
which such offer, solicitation or sale would be unlawful prior to
the registration or qualification under the securities laws of such
jurisdiction.
For more information on Hyperscale Data and its
subsidiaries, Hyperscale Data recommends that stockholders,
investors and any other interested parties read Hyperscale Data’s
public filings and press releases available under the Investor
Relations section at hyperscaledata.com or available at
www.sec.gov.
About Hyperscale Data, Inc.
Hyperscale Data is transitioning from a
diversified holding company pursuing growth by acquiring
undervalued businesses and disruptive technologies with a global
impact to becoming solely an owner and operator of data centers to
support high performance computing services. Through its wholly and
majority-owned subsidiaries and strategic investments, Hyperscale
Data owns and operates a data center at which it mines digital
assets and offers colocation and hosting services for the emerging
artificial intelligence ecosystems and other industries. It also
provides, through its wholly owned subsidiary, Ault Capital Group,
Inc., mission-critical products that support a diverse range of
industries, including an artificial intelligence software platform,
social gaming platform, equipment rental services,
defense/aerospace, industrial, automotive, medical/biopharma and
hotel operations. In addition, Hyperscale Data is actively engaged
in private credit and structured finance through a licensed lending
subsidiary. Hyperscale Data’s headquarters are located at 11411
Southern Highlands Parkway, Suite 240, Las Vegas, NV 89141.
Forward-Looking Statements
This press release contains “forward-looking
statements” within the meaning of Section 27A of the Securities Act
of 1933, as amended, and Section 21E of the Securities Exchange Act
of 1934, as amended. These forward-looking statements generally
include statements that are predictive in nature and depend upon or
refer to future events or conditions, and include words such as
“believes,” “plans,” “anticipates,” “projects,” “estimates,”
“expects,” “intends,” “strategy,” “future,” “opportunity,” “may,”
“will,” “should,” “could,” “potential,” or similar expressions.
Statements that are not historical facts are forward-looking
statements. Forward-looking statements are based on current beliefs
and assumptions that are subject to risks and uncertainties.
Forward-looking statements speak only as of the
date they are made, and the Company undertakes no obligation to
update any of them publicly in light of new information or future
events. Actual results could differ materially from those contained
in any forward-looking statement as a result of various factors.
More information, including potential risk factors, that could
affect the Company’s business and financial results are included in
the Company’s filings with the U.S. Securities and Exchange
Commission, including, but not limited to, the Company’s Forms
10-K, 10-Q and 8- K. All filings are available at www.sec.gov and
on the Company’s website at www.hyperscaledata.com.
Hyperscale Data Investor
Contact:IR@hyperscaledata.com or 1-888-753-2235
Hyperscale Data (AMEX:GPUS)
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