Hyperscale Data, Inc., a company specializing in electronic components, has entered into a material definitive agreement to sell a real estate property located in St. Petersburg, Florida.
The agreement, finalized on Wednesday, involves the sale of the property by Third Avenue Apartments LLC, a wholly owned indirect subsidiary of Hyperscale Data, to an unnamed purchaser for a total of $13.2 million.
Under the terms of the contract, the sale is expected to close by December 31, 2024, contingent upon due diligence and various closing conditions. The purchaser retains the right to terminate the agreement for any reason within a 60-day period from the execution date.
The transaction is particularly significant for Hyperscale Data as it requires the company to deposit $11 million of the purchase price into a segregated account for the benefit of its senior secured lenders. This action is in accordance with a loan and guaranty agreement dated December 14, 2023, and is necessary to release the property from the associated secured loan.
Hyperscale Data, formerly known as Ault Alliance, Inc., BitNile Holdings, Inc., and Ault Global Holdings, Inc., has undergone several name changes, with the most recent occurring on January 3, 2023. The company is headquartered in Las Vegas, Nevada, and is incorporated in Delaware.
The company's common stock and 13.00% Series D Cumulative Redeemable Perpetual Preferred Stock are both listed on the NYSE American under the symbols GPUS and GPUS PRD, respectively.
InvestingPro Insights
The recent property sale agreement by Hyperscale Data, Inc. should be viewed in the context of the company's current financial situation. According to InvestingPro data, Hyperscale Data is facing significant challenges. The company's market capitalization stands at just $8.51 million, reflecting investor concerns about its performance.
InvestingPro Tips highlight that Hyperscale Data "operates with a significant debt burden" and "may have trouble making interest payments on debt." These insights are particularly relevant to the property sale, as the company is required to deposit $11 million of the $13.2 million sale price into a segregated account for its senior secured lenders. This move appears to be a strategic effort to address its debt obligations.
The company's financial struggles are further underscored by its negative operating income of -$63.06 million over the last twelve months as of Q2 2024, and a concerning operating income margin of -40.9%. An InvestingPro Tip also notes that the company is "quickly burning through cash," which may explain the urgency to sell assets like the St. Petersburg property.
For investors seeking a more comprehensive analysis, InvestingPro offers 13 additional tips for Hyperscale Data, providing a deeper understanding of the company's financial health and market position.
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