Business Context and Reporting Period
Company: Hyperscale Data, Inc. (NYSE American: GPUS, GPUS PD)
Filing Type: Form 8-K (Current Report)
Date of Report: February 6, 2025
Event Date: February 5, 2025
Context: The Company entered into an Exchange Agreement with Orchid Finance LLC to restructure existing debt obligations.
Key Financial Metrics and Transaction Details
This filing reports a specific debt restructuring transaction rather than periodic financial performance metrics (revenue, profit, cash flow). Key transaction figures include:
- Principal Amount: $1,925,141.71 (New Convertible Promissory Note)
- Interest Rate: 15% per annum (18% per annum upon event of default)
- Maturity Date: May 5, 2025
- Conversion Price: $4.00 per share of Class A Common Stock
- Conversion Premium: $0.05 above the closing price on the Closing Date
- Conversion Trigger: Convertible at any time after NYSE American approval of the Supplemental Listing Application (SLAP)
Material Changes Versus Prior Period
The filing details a material change in the Company's capital structure through the cancellation of an outstanding term note issued on April 29, 2024 (the "Original Note").
- Debt Restructuring: The Original Note, which had outstanding principal and accrued but unpaid interest totaling $1,925,141.71, was fully cancelled.
- Instrument Swap: The cancelled debt was exchanged for a new convertible promissory note with a fixed conversion price and a maturity date of May 5, 2025.
Guidance, Outlook, Risks, and Unusual Items
Management Commentary: The transaction was executed to restructure debt with Orchid Finance LLC. The new note includes standard events of default, including failure to pay amounts due, failure to deliver conversion shares, covenant defaults, and bankruptcy events.
Risks and Contingencies:
- Conversion Timing: Conversion to equity is contingent upon NYSE American approval of the Supplemental Listing Application.
- Default Risk: Interest rates increase to 18% per annum if an event of default occurs.
- Regulatory Compliance: The issuance relied on the exemption from registration requirements under Section 3(a)(9) of the Securities Act of 1933.
Unusual Items: The filing explicitly states it does not constitute an offer to sell or a solicitation of any offer to buy the Conversion Shares.
Investor Verification Checklist
- Verify the status of the Supplemental Listing Application (SLAP) with NYSE American to determine if the note is currently convertible.
- Confirm the Company's ability to meet the May 5, 2025 maturity date to avoid the 18% default interest rate.
- Review the full text of the Exchange Agreement (Exhibit 10.1) and Note (Exhibit 4.1) for specific covenants and default triggers.
- Assess the dilution impact of the potential conversion of $1,925,141.71 at $4.00 per share (approximately 481,285 shares).