Hyperscale Data, Inc. (NYSE American:GPUS) has disclosed further sales of its Series C convertible preferred stock and associated warrants to an affiliate, Ault & Company, Inc., reaching an aggregate purchase price of $44.65 million as of today. This transaction is part of a larger agreement that could see Ault & Company invest up to $75 million in Hyperscale Data.
The deal, originally struck on November 6, 2023, saw the sale of 350 shares of Series C convertible preferred stock and warrants to purchase 103,474 shares of common stock for $350,000. To date, 44,650 shares of the preferred stock and warrants to buy 13,200,297 common shares have been sold under this arrangement. The preferred stock and warrants were sold to the Purchaser in reliance upon an exemption from the registration requirements under Section 4(a)(2) of the Securities Act of 1933.
The company’s common stock and 13.00% Series D Cumulative Redeemable Perpetual Preferred Stock are listed on the NYSE American under the symbols GPUS and GPUS PRD, respectively. The business is headquartered in Las Vegas, Nevada, and has undergone several name changes, with the most recent being from Ault Alliance, Inc. to Hyperscale Data, Inc. on January 3, 2023.
In other recent news, Hyperscale Data, Inc. has made significant strides with its financial and operational developments. The company has entered into a definitive agreement to sell a real estate property in St. Petersburg, Florida for $13.2 million, with the sale expected to close by December 31, 2024. This transaction necessitates Hyperscale Data to deposit $11 million of the purchase price into an account for the benefit of its senior secured lenders.
The company also announced a strategic shift towards enhancing its data center operations, particularly its artificial intelligence (AI) data center in Michigan. This facility is set for a substantial expansion, planning to increase its capacity from approximately 30 megawatts to 300 megawatts, contingent on necessary regulatory approvals and financing.
Hyperscale Data recently underwent a significant rebranding from Ault Alliance, Inc. and changed its trading symbols on the NYSE American. This rebranding initiative aligns with the company's strategic direction and doesn't require stockholder approval.
Furthermore, the company's shareholders approved the conversion of a 10% OID Convertible Promissory Note into common stock, a financial maneuver that could potentially influence the company's capital structure. This move aligns with the analysis from Goldman Sachs, which suggests that Hyperscale Data's strategic reorganization fits with industry trends, as AI could drive a 160% surge in data center power demand.
Lastly, as part of its capital-raising efforts, Hyperscale Data sold 300 shares of Series C convertible preferred stock and accompanying warrants for a total of $300,000.
InvestingPro Insights
Recent InvestingPro data paints a challenging picture for Hyperscale Data, Inc. (NYSE American:GPUS). The company's market capitalization stands at a modest $7.85 million, with a price-to-book ratio of 0.29 as of the last twelve months ending Q2 2024. This low valuation multiple could be a reflection of the company's financial struggles, as highlighted by two key InvestingPro Tips.
Firstly, InvestingPro indicates that GPUS "Operates with a significant debt burden" and "May have trouble making interest payments on debt." These insights are particularly relevant given the company's recent capital raising efforts through the sale of convertible preferred stock to an affiliate. The additional capital may be crucial for addressing the company's debt obligations and operational needs.
Secondly, the tip that GPUS is "Quickly burning through cash" aligns with the company's pursuit of up to $75 million in investment from Ault & Company. This cash burn rate could explain the urgency in securing additional funding through the ongoing stock sale agreement.
For investors seeking a more comprehensive analysis, InvestingPro offers 12 additional tips that could provide further context to Hyperscale Data's financial situation and market performance.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.