Business Context and Reporting Period
Company: Hyperscale Data, Inc.
Filing Type: Form 8-K (Current Report)
Date of Report: August 1, 2025
Event Date: July 31, 2025 (Execution Date)
Summary: The Company entered into a Securities Purchase Agreement with an affiliate, Ault & Company, Inc., to sell up to 100,000 shares of Series H Convertible Preferred Stock for a total purchase price of up to $100,000,000.
Key Financial Metrics and Transaction Terms
Transaction Value: Up to $100,000,000.00.
Instrument: Series H Convertible Preferred Stock (Stated Value: $1,000.00 per share).
Dividend Rate: 9.5% annual cumulative cash dividends ($95.00 per share), payable monthly in arrears.
Dividend Payment Option: For the first two years, the Company may elect to pay dividends in Common Stock rather than cash.
Penalty Rate: If dividends are in arrears, the rate increases to 12% per annum.
Conversion Price: The greater of $0.10 (Floor Price) or 105% of the volume-weighted average price of Common Stock (capped at $0.79645 initially).
Liquidity Reserve: The Company must establish a reserve account funded with no less than 12.5% of gross proceeds, maintained for at least nine months.
Debt and Cash Flow: The filing text does not provide current revenue, profit, cash flow, or existing debt figures.
Material Changes and Conditions
- Stockholder Approval: Conversion of Series H stock exceeding 19.99% of outstanding Common Stock requires Stockholder Approval. The Company agreed to file a proxy statement.
- Financing Condition: Closing is conditioned upon the Purchaser receiving financing to consummate the transaction.
- Anti-Dilution Protection: The Company is prohibited from entering into financing at a price lower than the Conversion Price for four years or until the Purchaser holds fewer than 5,000 shares.
- Participation Rights: The Purchaser has a right to participate in subsequent financings to maintain its percentage beneficial ownership.
- Liquidation Preference: Series H ranks senior to Series A, D, E, and F Preferred Stock, and pari passu with Series C and G.
Guidance, Outlook, and Risks
Management Commentary: The Company issued a press release on August 1, 2025, announcing the agreement. The transaction is intended to raise capital subject to customary closing conditions.
Risks and Contingencies:
- Termination: The Agreement automatically terminates if closing does not occur prior to December 31, 2026, unless extended by the Purchaser.
- Forward-Looking Statements: The filing contains forward-looking statements regarding operating results and future prospects, which are subject to inherent uncertainties.
- Regulatory Approval: The transaction is subject to regulatory and Stockholder Approval.
Investor Verification Checklist
- Verify the status of the Purchaser's financing required to close the transaction.
- Confirm the timeline for the filing of the proxy statement to obtain Stockholder Approval for conversions exceeding 19.99%.
- Review the impact of the 12.5% reserve requirement on immediate cash availability.
- Assess the potential dilution impact based on the conversion price floor of $0.10 versus the current market price.
- Monitor the Company's ability to meet monthly dividend obligations, noting the option to pay in stock for the first two years.