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LAS VEGAS - Hyperscale Data, Inc. (NYSE American: GPUS) has secured a financial agreement with an institutional investor for up to $50 million in equity financing. This capital will be directed towards accelerating the expansion of its Michigan data center, as part of the company’s growth strategy. The financing comes at a crucial time for the company, which InvestingPro data shows has been operating with a significant debt burden of $127.62 million and a concerning current ratio of 0.23, indicating potential liquidity challenges.
The financing comes through the sale of up to 50,000 shares of newly designated Series B Convertible Preferred Stock. Hyperscale Data’s CEO, William B. Horne, expressed that the deal is a strong endorsement of the company’s vision and business model, which will enable the advancement of construction on the Michigan data center to meet growing demand for scalable and energy-efficient data center infrastructure. According to InvestingPro analysis, the company currently maintains a market capitalization of just $2.81 million, with annual revenue of $139.43 million. Subscribers to InvestingPro can access 15 additional key insights about GPUS’s financial health and market position.
The Michigan facility is being developed to cater to high-density workloads for enterprise, artificial intelligence (AI), and high-performance computing (HPC) cloud providers. It will feature advanced cooling technologies and robust power infrastructure, with a focus on sustainable and efficient operations. Executive Chairman Milton Todd Ault III emphasized the company’s commitment to building resilient, efficient, and future-proof digital infrastructure.
The expansion of the data center’s overall power capacity is scheduled to begin in the coming months, with the company set to provide updates on the buildout’s progress to its stockholders.
The agreement stipulates monthly closings with the investor, who is obliged to fund a minimum of $1 million each month, subject to certain conditions, and possesses the right to accelerate closings. Details of the transaction will be disclosed in a Current Report on Form 8-K to be filed with the United States Securities and Exchange Commission.
The preferred shares are being issued in a private placement under the Securities Act of 1933 and have not been registered under the Securities Act, or any state securities laws, and therefore cannot be offered or sold in the United States absent registration or an applicable exemption.
This move is a part of Hyperscale Data’s plan to focus solely on owning and operating data centers to support HPC services by the end of 2025, following the divestiture of its subsidiary, Ault Capital Group, Inc. With the stock currently trading at $2.23, InvestingPro analysis suggests the shares may be undervalued, though investors should note the company’s overall financial health score of 1.49 is rated as WEAK. For detailed valuation metrics and comprehensive analysis, visit the Most Undervalued Stocks list on InvestingPro.
The information in this article is based on a press release statement from Hyperscale Data, Inc.
In other recent news, Hyperscale Data, Inc. announced a significant financial gain of $17.5 million due to the deconsolidation of its subsidiary, Avalanche International, Inc. This move is expected to enhance the company’s balance sheet by eliminating current liabilities. Additionally, Hyperscale Data shareholders approved the conversion of Series G Preferred Stock into Class A Common Stock and warrants, as part of a strategic financial maneuver with a purchase price of up to $25 million. In another development, the company entered into an amended forbearance agreement with an institutional investor, extending the forbearance period and issuing a $3.5 million convertible promissory note.
Moreover, Hyperscale Data amended the terms of its Series G Convertible Preferred Stock, adjusting the "Voting Floor Price" from $5.38 to $6.244. The company also secured $860,000 through the sale of Series G convertible preferred stock and associated warrants to Ault & Company, with the potential for further purchases totaling up to $25 million. These actions reflect the company’s ongoing financial strategy and adjustments to its governance structures. Investors can find detailed information in the company’s SEC filings and press releases.
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