Hyperscale Data, Inc. (NYSE American: GPUS), a leading manufacturer in the electronic components sector, announced today it has secured a significant investment totaling $46.98 million through the sale of convertible preferred stock and associated warrants. This investment comes as part of an ongoing securities purchase agreement with Ault & Company, Inc., an affiliate of the company.
The latest transaction, which took place on Thursday, involved the sale of 50 shares of Series C convertible preferred stock and warrants to purchase an additional 14,782 shares of common stock for a price of $50,000. Previously, on Monday, Hyperscale Data sold 400 shares of Series C convertible preferred stock and warrants for 118,256 common shares at a cost of $400,000. These sales are part of a larger agreement that allows for up to $75 million in funding through staggered closings.
The terms of the securities purchase agreement, including the specifics of the Series C convertible preferred stock and the warrants, were initially detailed in a Form 8-K filed with the Securities and Exchange Commission on November 7, 2023. The Series C Convertible Preferred Stock and the Series C Warrants were offered and sold in reliance upon an exemption from the registration requirements under Section 4(a)(2) of the Securities Act of 1933.
Hyperscale Data, Inc., formerly known under various names including Ault Alliance, Inc., BitNile Holdings, Inc., and Ault Global Holdings, Inc., has been actively working to secure funding to bolster its operations and growth strategy. The company, headquartered in Las Vegas, Nevada, is incorporated in Delaware and operates within the electronic components industry under the SIC code 3679.
In other recent news, Hyperscale Data, Inc. has been active in a series of financial transactions. The company has announced a reverse stock split, consolidating every thirty-five shares into one, reducing the number of shares from approximately 38.8 million to about 1.1 million. Concurrently, Hyperscale Data has been involved in a series of private equity sales, including the issuance of Series C convertible preferred stock and corresponding warrants to Ault & Company, Inc. The aggregate investment from these transactions has reached $46.53 million, with the potential to reach up to $75 million.
Hyperscale Data has also sold a real estate property in St. Petersburg, Florida for $13.2 million, depositing $11 million of the sales price into an account benefiting its senior secured lenders. The company is focusing on enhancing its data center operations, specifically its artificial intelligence (AI) data center in Michigan, with plans to increase the facility's capacity from approximately 30 megawatts to 300 megawatts, contingent on regulatory approvals and financing.
Lastly, Hyperscale Data's shareholders have approved the conversion of a 10% OID Convertible Promissory Note into common stock. These are recent developments in Hyperscale Data's ongoing activity in the electronic components sector.
InvestingPro Insights
Recent financial data from InvestingPro reveals some challenges for Hyperscale Data, Inc. (NYSE American: GPUS). The company's market capitalization stands at a modest $6.7 million, reflecting its current position in the market. Despite the recent $46.98 million investment, InvestingPro Tips indicate that GPUS is "quickly burning through cash" and "may have trouble making interest payments on debt." This context adds importance to the recent funding secured through the sale of convertible preferred stock and warrants.
The company's revenue for the last twelve months as of Q3 2023 was $117.11 million, but it experienced a significant revenue decline of 25.43% during this period. This aligns with the InvestingPro Tip suggesting that the "stock has fared poorly over the last month," with a one-month price total return of -22.79%.
For investors seeking a more comprehensive analysis, InvestingPro offers 12 additional tips for GPUS, providing a deeper understanding of the company's financial health and market performance.
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