Hyperscale Data Shifts Focus to AI-Powered Data Centers with $13M Property Sale and $25M Financing Deal

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Hyperscale Data Inc. sells a $13 million property in St. Petersburg and secures up to $25 million in financing to transition into a pureplay data center business supporting AI and high-performance computing services.

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Hyperscale Data's Strategic Shift to AI-Focused Data Centers

Hyperscale Data, Inc. (NYSE American: GPUS) is making significant moves to transform itself into a pureplay data center business focused on supporting high-performance computing (HPC) services for Artificial Intelligence (AI) solutions. The company has recently completed two major transactions that highlight this strategic shift.

$13 Million Property Sale in St. Petersburg

On December 16, 2024, Hyperscale Data announced the sale of its St. Petersburg development property for $13 million through its wholly-owned indirect subsidiary, Third Avenue Apartments LLC 1. This sale is part of the company's ongoing efforts to reorganize its holdings and focus on its data center operations.

Milton "Todd" Ault III, Executive Chairman of Hyperscale Data, stated, "As we previously told stockholders, this is a step in the right direction for the Company and its future as we focus our energy on our data center operations" 1. The company plans to hold approximately $11 million from the sale in a segregated account, bringing the total balance to about $18.3 million.

$25 Million Financing Agreement

In a separate announcement on December 23, 2024, Hyperscale Data revealed that it had entered into a Securities Purchase Agreement with Ault & Company, Inc. (A&C), a related party, for up to $25 million in financing 2. This agreement involves the issuance and sale of up to $25 million in shares of Series G Convertible Preferred Stock to A&C.

Financing Terms and Use of Proceeds

The Preferred Shares will have a stated value of $1,000 per share and will be convertible into common stock at a conversion price that is the greater of $0.25 per share or a 5% premium to the closing sale price of the common stock on the day prior to conversion, capped at $6.00 2. Additionally, A&C will receive warrants to purchase up to approximately 4 million shares of common stock, exercisable for five years at $5.00 per share.

The proceeds from this financing will be used for:

  1. Expansion of the MI data center
  2. Infrastructure upgrades to support high-performance computing services for AI solutions
  3. Repayment of outstanding indebtedness
  4. General working capital purposes 2

Implications for AI and High-Performance Computing

This strategic shift by Hyperscale Data underscores the growing importance of data centers in supporting AI and high-performance computing services. As the demand for AI-powered solutions continues to rise, companies like Hyperscale Data are positioning themselves to provide the necessary infrastructure and services.

Ault emphasized the significance of this move, stating, "This transaction is more than a number -- it's a declaration of my steadfast confidence in our data centers, the crane company, the lending firm, and the exceptional portfolio companies we've nurtured over the past seven years" 2.

Conclusion

Hyperscale Data's recent transactions signal a clear intent to focus on the burgeoning AI and high-performance computing market. By divesting non-core assets and securing substantial financing, the company is positioning itself to become a key player in providing the infrastructure necessary for the next generation of AI-powered technologies.

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