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Hyperscale Data, Inc. (NYSE American: GPUS), an electronic components manufacturer with annual revenue of $139.43 million, has entered into an amended and restated forbearance agreement with an institutional investor. This agreement extends the forbearance period through May 15, 2025, in exchange for the issuance of an amended and restated convertible promissory note amounting to $3.5 million. According to InvestingPro analysis, the company operates with a significant debt burden and faces challenges in maintaining healthy liquidity, with a current ratio of just 0.23.
On Monday, the company disclosed the new agreement, which allows the investor to forebear from exercising rights and remedies under a previous note, which was due on October 19, 2024. The new note includes the amount due under the prior forbearance note, a forbearance extension fee, and a true-up amount, totaling $3.5 million. This restructuring comes as the company manages a total debt burden of $127.62 million, with a concerning debt-to-equity ratio of 46.78.
The amended and restated forbearance note (A&R Forbearance Note) carries an 18% annual interest rate and matures on May 15, 2025. Following the approval by the NYSE American LLC and Hyperscale Data’s stockholders, the note will be convertible into shares of the company’s Class A common stock at a conversion price of $2.00 per share, subject to adjustments.
The conversion of the A&R Forbearance Note into common stock is contingent upon the NYSE’s approval and the approval of the company’s stockholders. Hyperscale Data is restricted from issuing shares if it would lead to non-compliance with NYSE regulations, pending stockholder approval.
The A&R Forbearance Note includes standard events of default, such as failure to pay due amounts, covenant breaches, bankruptcy events, and suspension or delisting of the company’s common stock from an eligible exchange.
This financial maneuver follows a series of corporate name changes, with Hyperscale Data formerly known as Ault Alliance, Inc., BitNile Holdings, Inc., and Ault Global Holdings, Inc.
The issuance of the A&R Forbearance Note was made in reliance on an exemption from registration under Section 4(a)(2) of the Securities Act of 1933. This move creates a direct financial obligation for Hyperscale Data and is part of the company’s ongoing financial strategy, as detailed in the recent SEC filing.
In other recent news, Hyperscale Data, Inc. has made significant financial moves involving its preferred stock. The company has raised $48.1 million through the sale of Series C convertible preferred stock and associated warrants to its affiliate, Ault & Company, Inc. This sale is part of a larger agreement allowing up to $75 million in sales of Series C preferred stock. Additionally, Hyperscale Data has secured $860,000 from the sale of its Series G convertible preferred stock and warrants, also to Ault & Company. This transaction is part of an ongoing series of closings under a material definitive agreement. The company has also amended the terms of its Series G Convertible Preferred Stock, adjusting the "Voting Floor Price" to $6.244. Furthermore, Hyperscale Data has entered into a forbearance agreement regarding a $5,390,000 convertible promissory note, which includes a new forbearance note valued at $853,067.93. These recent developments reflect the company’s ongoing adjustments to its financial and governance structures.
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