Core Insights - Hyperscale Data Inc. (NYSE: GPUS) has announced an "at-the-market" stock issuance plan to raise up to $125 million in common stock [1] - The net proceeds will primarily be used for purchasing Bitcoin and developing a data center in Michigan, with a smaller portion allocated for purchasing XRP, working capital, and general corporate purposes, including debt repayment or stock buybacks [1] - The company operates a data center for mining through its subsidiary Sentinum and provides AI ecosystem hosting services [1]

Core Viewpoint - Hyperscale Data, Inc. has launched an "at-the-market" equity offering program to raise up to $125 million through the sale of common stock, with plans to use the proceeds primarily for Bitcoin acquisition and development of its Michigan data facility [1][3]. Group 1: Offering Details - The equity offering program allows the company to sell shares at market prices through Wilson-Davis & Co., Inc. as the sales agent [1][2]. - The offering is conducted under a shelf registration statement that became effective on August 28, 2025, allowing shares to be sold via a prospectus [4]. Group 2: Use of Proceeds - The majority of the net proceeds from the offering will be allocated to acquiring Bitcoin and developing the Michigan data facility [3]. - A smaller portion of the proceeds will be used to acquire XRP and for general corporate purposes, including potential debt repayment or stock repurchase [3]. Group 3: Company Overview - Hyperscale Data operates a data center through its subsidiary Sentinum, focusing on digital asset mining and colocation services for AI ecosystems [7]. - The company is preparing for the divestiture of its subsidiary Ault Capital Group, expected in the first quarter of 2026, which will shift its focus to data center operations and digital asset holdings [8].

Core Viewpoint - Hyperscale Data, Inc. is shifting its strategy to retain all mined Bitcoin and expand its digital asset holdings, particularly in XRP, while focusing on AI-optimized data centers as a core business model [1][2][4]. Group 1: Bitcoin and Digital Asset Strategy - The company will retain all Bitcoin mined, marking a significant change in corporate policy to enhance its balance sheet [1]. - Starting September 2, 2025, the company will publish weekly reports on its Bitcoin and XRP holdings to ensure transparency [2]. - The current mining run rate is approximately 190 Bitcoin annually, and the company plans to hold these coins instead of selling them [7]. Group 2: AI Infrastructure Development - Hyperscale Data is transforming its data centers to support AI computing requirements, with plans to increase power capacity from approximately 30 MW to 70 MW over the next 20 months [7]. - The company anticipates that the Michigan facility's power capacity could eventually reach around 340 MW, pending agreements with local utility providers [7]. - Development of additional data centers in Montana is underway, which could provide up to 20 MW of power if initial phases are completed [7]. Group 3: Corporate Structure and Valuation - The company is evolving into a pure play focused on AI data centers and digital assets, separating from its diversified holding company, Ault Capital Group [4][9]. - The current market capitalization is approximately $16 million, which the company believes does not reflect its true value, especially with projected full-year 2025 revenue guidance of $125 million to $135 million [11][12]. - The divestiture of Ault Capital Group is expected to occur in the first quarter of 2026, allowing Hyperscale Data to focus solely on its core operations [18]. Group 4: Leadership and Future Outlook - The leadership team is aligned with stockholders, with significant investments from Ault & Company, Inc., the largest stockholder [10]. - The company aims to build world-class AI infrastructure, grow its digital asset treasury, and maintain transparency in reporting [21]. - The strategic focus on scalable infrastructure and a growing digital asset base is expected to enhance long-term value for stockholders [15].

Core Viewpoint - Hyperscale Data, Inc. reaffirms its full-year 2025 revenue guidance of $125 million to $135 million, bolstered by the anticipated contributions from its defense affiliate Gresham Worldwide and growth in high-margin software platforms [1][2][4]. Group 1: Financial Guidance and Revenue Expectations - The company expects Gresham Worldwide to contribute approximately $40 million in annualized revenue upon its emergence from Chapter 11 on October 1, 2025 [2]. - Hyperscale Data anticipates meaningful growth from its expanding high-margin software platforms, including blockchain infrastructure and tokenization solutions [3]. Group 2: Strategic Developments - The court's approval of Gresham Worldwide's reorganization plan enhances visibility into its expected contributions starting in Q4 2025 [4]. - The company is pursuing growth through its Michigan data center, which is viewed as a transformational opportunity for future revenue, although it is not expected to contribute significantly in 2025 [4]. Group 3: Company Structure and Operations - Hyperscale Data operates a data center through its subsidiary Sentinum, focusing on digital asset mining and colocation services for AI ecosystems [5]. - The company plans to divest Ault Capital Group, Inc. in Q1 2026, which will allow it to focus on high-performance computing services and digital asset holdings [6].

Core Viewpoint - Hyperscale Data, Inc. announces that Gresham Worldwide has received final court approval for its Chapter 11 reorganization plan, allowing it to emerge from bankruptcy on October 1, 2025, and is expected to contribute approximately $40 million in annual sales to the company [1][2][3] Group 1: Company Developments - Gresham Worldwide will be reconsolidated as a direct subsidiary of Hyperscale Data upon its emergence from bankruptcy, enhancing the company's diversified platform and supporting long-term growth [2] - The court-approved plan reflects extensive negotiations among creditors and stakeholders, positioning Gresham Worldwide with a stronger balance sheet and operational stability [3] Group 2: Financial Impact - The anticipated contribution of Gresham Worldwide is projected to be around $40 million in annualized sales, which will further strengthen Hyperscale Data's financial results [2] - The emergence from Chapter 11 is expected to provide Gresham Worldwide with renewed financial strength, enabling it to deliver meaningful revenue and long-term value for stockholders [3] Group 3: Future Plans - Hyperscale Data plans to divest Ault Capital Group, Inc. in the first quarter of 2026, which will allow the company to focus on owning and operating data centers and supporting high-performance computing services [6] - The divestiture will occur through the exchange of Series F Preferred Stock for shares of Class A and Class B Common Stock of ACG, allowing stockholders to become shareholders of ACG [7]

PART I – FINANCIAL INFORMATION [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents Hyperscale Data, Inc.'s unaudited condensed consolidated financial statements, detailing financial position, performance, and cash flows, alongside critical going concern disclosures [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheet as of June 30, 2025, shows total assets of **$213.5 million**, total liabilities of **$205.6 million**, and a negative working capital of **$139.4 million** Condensed Consolidated Balance Sheet Highlights (as of June 30, 2025) | Metric | June 30, 2025 ($) | December 31, 2024 ($) | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $5,917,000 | $4,546,000 | | Total Current Assets | $62,009,000 | $58,413,000 | | Property and equipment, net | $135,841,000 | $144,357,000 | | **Total Assets** | **$213,501,000** | **$220,766,000** | | **Liabilities & Equity** | | | | Total Current Liabilities | $201,372,000 | $215,503,000 | | Total Liabilities | $205,605,000 | $218,676,000 | | Total Stockholders' Equity | $7,896,000 | $2,090,000 | | **Total Liabilities and Stockholders' Equity** | **$213,501,000** | **$220,766,000** | [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) The statements of operations show a Q2 2025 net loss of **$19.1 million** on **$25.9 million** revenue, an improvement from Q2 2024, driven by lending and trading activities Q2 2025 vs. Q2 2024 Statement of Operations Highlights | Metric | Q2 2025 ($) | Q2 2024 ($) | | :--- | :--- | :--- | | Total Revenue | $25,856,000 | $17,792,000 | | Gross Profit (Loss) | $6,127,000 | ($3,788,000) | | Loss from Operations | ($10,127,000) | ($26,930,000) | | Net Loss from Continuing Operations | ($17,338,000) | ($39,781,000) | | Net Loss Attributable to Hyperscale Data | ($19,051,000) | ($33,927,000) | | Net Loss per Common Share | ($2.66) | ($37.81) | H1 2025 vs. H1 2024 Statement of Operations Highlights | Metric | H1 2025 ($) | H1 2024 ($) | | :--- | :--- | :--- | | Total Revenue | $50,877,000 | $56,157,000 | | Gross Profit | $11,410,000 | $14,400,000 | | Loss from Operations | ($16,511,000) | ($23,273,000) | | Net Loss from Continuing Operations | ($22,061,000) | ($25,593,000) | | Net Loss Attributable to Hyperscale Data | ($23,256,000) | ($30,210,000) | | Net Loss per Common Share | ($3.89) | ($47.09) | [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For H1 2025, net cash used in operations was **$7.1 million**, offset by **$11.6 million** provided by financing activities, resulting in a **$2.2 million** increase in cash Six Months Ended June 30, 2025 vs 2024 Cash Flow Summary | Cash Flow Activity | H1 2025 ($) | H1 2024 ($) | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | ($7,055,000) | ($13,932,000) | | Net Cash Used in Investing Activities | ($2,331,000) | ($3,794,000) | | Net Cash Provided by Financing Activities | $11,613,000 | $18,821,000 | | **Net Increase in Cash and Restricted Cash** | **$2,233,000** | **$1,447,000** | [Notes to Condensed Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes detail accounting policies, going concern warnings, subsidiary deconsolidations, debt obligations, and significant financing activities, including subsequent capital raises - The company's financial condition raises substantial doubt about its ability to continue as a going concern, with negative working capital of **$139.4 million** and a history of net operating losses. Future operations are dependent on raising additional capital[34](index=34&type=chunk)[37](index=37&type=chunk) - In 2025, the company deconsolidated subsidiaries AVLP and Eco Pack due to bankruptcy and liquidation filings, resulting in a net gain of **$9.6 million**. Additionally, GIGA's operations were reclassified to discontinued operations following its Chapter 11 filing in 2024[48](index=48&type=chunk)[49](index=49&type=chunk)[51](index=51&type=chunk) - The company has significant debt, including **$88.5 million** in notes payable (with **$68.8 million** in default) and **$20.8 million** in convertible notes, nearly all of which is classified as current[80](index=80&type=chunk)[85](index=85&type=chunk) - Subsequent to the quarter's end, the company raised **$11.0 million** from Series B Preferred Stock sales and entered an agreement to sell up to **$100.0 million** of new Series H Preferred Stock to a related party, Ault & Company[136](index=136&type=chunk)[139](index=139&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=37&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's dual business focus, Q2 2025 revenue growth driven by lending and trading, and ongoing liquidity concerns requiring continuous capital raising [Results of Operations](index=41&type=section&id=Results%20of%20Operations) Q2 2025 revenue increased **45%** to **$25.9 million** due to lending and trading, offsetting a **45%** decline in crypto mining revenue, leading to improved net loss Q2 Revenue by Business Category (2025 vs. 2024) | Business Category | Q2 2025 Revenue ($) | Q2 2024 Revenue ($) | Change (%) | | :--- | :--- | :--- | :--- | | Sentinum (Crypto Mining) | $4,684,000 | $8,490,000 | -45% | | Energy (Crane Operations) | $11,582,000 | $11,700,000 | -1% | | AGREE (Hotel) | $5,377,000 | $5,134,000 | +5% | | TurnOnGreen | $1,692,000 | $1,236,000 | +37% | | Fintech (Lending & Trading) | $1,826,000 | ($9,763,000) | n/m | | **Total Revenue** | **$25,856,000** | **$17,792,000** | **+45%** | - The decrease in Sentinum's crypto mining revenue was primarily due to the April 2024 Bitcoin halving event, partially offset by a **50%** increase in the average Bitcoin price[175](index=175&type=chunk) - General and administrative expenses decreased by **13%** in Q2 2025 and **12%** in H1 2025, primarily due to the deconsolidation of subsidiaries (AVLP and Eco Pack) and reduced stock-based compensation[186](index=186&type=chunk)[208](index=208&type=chunk) - For the six months ended June 30, 2025, the company recognized a **$9.7 million** net gain on the deconsolidation of subsidiaries and a **$4.6 million** net loss on the extinguishment of convertible notes[214](index=214&type=chunk)[218](index=218&type=chunk)[219](index=219&type=chunk) [Liquidity and Capital Resources](index=48&type=section&id=Liquidity%20and%20Capital%20Resources) The company faces precarious liquidity with **$5.9 million** cash and **$139.4 million** negative working capital, relying on **$11.6 million** from financing activities to sustain operations - As of June 30, 2025, the company had cash and cash equivalents of **$5.9 million**, excluding **$21.3 million** in restricted cash[222](index=222&type=chunk) Cash Flow Summary (Six Months Ended June 30, 2025) | Cash Flow Activity | Amount ($) | | :--- | :--- | | Net Cash Used in Operating Activities | ($7.1 million) | | Net Cash Used in Investing Activities | ($2.3 million) | | Net Cash Provided by Financing Activities | $11.6 million | - Subsequent to quarter-end (from July 1 to August 14, 2025), the company raised an additional **$11.0 million** in cash from the sale of Series B convertible preferred stock[227](index=227&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=49&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section is not applicable as the registrant is a smaller reporting company - This disclosure is not applicable as the registrant is a smaller reporting company[229](index=229&type=chunk) [Controls and Procedures](index=49&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were ineffective as of June 30, 2025, due to material weaknesses in accounting resources, segregation of duties, and IT controls - The CEO and CFO concluded that the company's internal control over financial reporting was not effective as of June 30, 2025[231](index=231&type=chunk) - Identified material weaknesses include: insufficient accounting department resources, lack of segregation of duties, and ineffective IT controls for user access and program change management, particularly for revenue recognition and crypto assets[233](index=233&type=chunk)[234](index=234&type=chunk) - Remediation efforts include engaging third-party specialists, implementing new systems, and increasing headcount with internal control expertise[235](index=235&type=chunk)[238](index=238&type=chunk) PART II – OTHER INFORMATION [Legal Proceedings](index=51&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in ongoing litigation, most notably a lawsuit by Arena Investors, LP, seeking over **$3.75 million** related to a subsidiary's note guaranty - The company is a defendant in a lawsuit filed by Arena Investors, LP, which seeks damages of over **$3.75 million** related to a guaranty on a note from the subsidiary ROI[242](index=242&type=chunk)[243](index=243&type=chunk) - While the outcome is uncertain, an unfavorable result in the Arena litigation may have a material adverse effect on the company's business and financial condition[248](index=248&type=chunk) [Risk Factors](index=52&type=section&id=Item%201A.%20Risk%20Factors) There are no updates or changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for FY2024 - No updates or changes to the risk factors from the Annual Report on Form 10-K for the year ended December 31, 2024[251](index=251&type=chunk) [Other Information (Items 2, 3, 4, 5)](index=52&type=section&id=Item%202,%203,%204,%205) The company reported no activity for unregistered sales of equity, defaults on senior securities, or other material information, and mine safety disclosures are not applicable - The company reported no activity for the following items: Item 2: Unregistered Sales of Equity Securities and Use of Proceeds, Item 3: Defaults Upon Senior Securities, Item 5: Other Information[252](index=252&type=chunk)[253](index=253&type=chunk)[255](index=255&type=chunk) - Item 4, Mine Safety Disclosures, is not applicable to the company[254](index=254&type=chunk) [Exhibits](index=52&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including various agreements, corporate documents, and required officer certifications - Key exhibits filed include a Securities Purchase Agreement from April 2025, a Termination Agreement from May 2025, a Settlement Agreement from June 2025, and a Hosting Services Agreement from June 2025[258](index=258&type=chunk)

Core Viewpoint - Hyperscale Data, Inc. has launched OnlyBulls, an AI-powered mobile app for portfolio management, designed to provide users with a personal market assistant available 24/7 [1][2][4]. Group 1: Product Features - OnlyBulls is available on both the Apple App Store and Google Play Store, offering real-time financial insights and asset monitoring through its proprietary AI engine [2]. - The app functions as a full-time assistant, providing constant updates, real-time alerts, and actionable intelligence directly to users [2][3]. - Key features include a 24/7 AI agent, mobile-only design, real-time monitoring and alerts, and user-friendly tools for portfolio analysis and news aggregation [9]. Group 2: Company Background - Hyperscale Data operates through subsidiaries, including Sentinum, which manages a data center for digital asset mining and hosting services [7]. - The company is pursuing growth through the acquisition of undervalued businesses and disruptive technologies via its subsidiary Ault Capital Group, Inc. [7]. - A divestiture of ACG is expected in the first quarter of 2026, which will position the company as a data center operator focused on high-performance computing services [8][11].

Market Overview - The Data Center Power Management Market was valued at USD 22.0 billion in 2024 and is projected to reach USD 40.1 billion by 2032, with a CAGR of 7.80% from 2025 to 2032 [1][5]. Growth Drivers - The market is experiencing transformative growth driven by increasing global data consumption, energy-efficient infrastructure services, and the expansion of cloud and hyperscale data centers [2]. - Intelligent power solutions that integrate with renewable energy sources to monitor real-time power consumption are preferred by organizations to reduce operational costs and carbon footprints [2]. Regional Insights - In the U.S., the market was valued at USD 5.9 billion in 2024 and is expected to grow to USD 10.6 billion by 2032, reflecting a CAGR of 7.57% [3]. - North America accounted for 35% of global revenue in 2024, supported by advanced digital infrastructure and early adoption of cloud technologies [12]. - The Asia-Pacific region is anticipated to grow the fastest, driven by significant investments in digital infrastructure and government-led renewable energy initiatives [13]. Market Segmentation By Component - The hardware segment held the largest market share at 48% in 2024, driven by essential components like Uninterruptible Power Supply (UPS) systems and Power Distribution Units (PDUs) [6]. - The services segment is expected to register the fastest CAGR during the forecast period due to the increasing complexity of data center environments [7]. By Data Center Type - Hyperscale data centers led the market with a 26% revenue share in 2024, essential for handling large data workloads and supporting cloud services [8]. - Edge data centers are projected to witness the highest CAGR, driven by the demand for low-latency processing and real-time analytics [9]. By Industry - The IT & Telecom sector held the largest share in 2024, fueled by the demand for cloud computing and the expansion of 5G networks [10]. - The retail sector is expected to record the fastest CAGR, driven by the growth of e-commerce and the need for robust IT infrastructure [11]. Key Players - Major players in the market include Schneider Electric, Eaton Corporation, ABB Ltd., Vertiv Holdings Co., Siemens AG, Delta Electronics, Huawei Technologies, Rittal GmbH & Co. KG, Tripp Lite, and Legrand SA [4]. Recent Developments - Schneider Electric launched the Galaxy VXL, a compact UPS for AI workloads, and partnered with NVIDIA for a liquid-cooled AI cluster design [16]. - Vertiv introduced the MegaMod CoolChip, a modular data center solution that reduces deployment time by up to 50% [16].

Core Viewpoint - Hyperscale Data, Inc. is actively expanding its investment in digital assets, particularly $XRP, through its subsidiary Sentinum, with a commitment to purchase up to $10 million worth of $XRP as part of its cryptocurrency investment strategy [3] Group 1: Acquisition Details - Sentinum acquired 8,150 tokens of $XRP at an average price of $3.0712, totaling approximately $25,000 during the week of August 4 to August 10, 2025 [1] - Following this acquisition, Sentinum's total holdings of $XRP reached 15,100 tokens, valued at approximately $49,490.25 based on the closing price of $3.2775 on August 10, 2025 [2] Group 2: Strategic Commitment - The company plans to report Sentinum's $XRP acquisitions weekly, enhancing transparency in its digital asset investment activities [3] - The company has paid down approximately $25 million of non-affiliated debt, improving its financial position to focus on long-term value initiatives, including its AI-driven data center platform [3] Group 3: Future Plans - The company anticipates increasing the pace of $XRP purchases in the coming weeks as part of its disciplined dollar cost averaging strategy [3] - Hyperscale Data is evaluating opportunities to enhance its digital asset strategy, which may include retaining a portion of mined Bitcoin and expanding its digital asset reserves [3]

Core Viewpoint - Hyperscale Data, Inc. has successfully reduced its outstanding consolidated non-affiliated debt by approximately $25 million year-to-date, significantly improving its capital structure and positioning the company for long-term financial strength as it develops its AI data center in Michigan [1][2][3]. Debt Reduction and Financial Position - The $25 million debt reduction was achieved through repayments and strategic conversions, leading to lower leverage and improved liquidity ratios, enhancing the company's ability to access growth capital on favorable terms [2][3]. - This debt reduction is part of a broader strategy to build a financially resilient platform capable of supporting large-scale infrastructure development while delivering long-term value to stockholders [2]. AI Data Center Development - The company is advancing the development of its flagship AI data center in Michigan, which is expected to serve as a hub for enterprise-grade and hyperscale AI workloads [3]. - The Michigan facility, covering 617,000 square feet, aims to increase its power capacity to 70 megawatts (MW) over the next 20 months, with a long-term goal of reaching approximately 340 MW, contingent on agreements with local utility providers and securing funding [3]. Strategic Positioning - The company is positioning itself to be financially agile and operationally ready to meet the exponential growth in AI and compute-intensive applications, enabling it to attract strategic partners and optimize capital deployment [4]. - The divestiture of Ault Capital Group, Inc. is expected to occur in the first quarter of 2026, which will further streamline the company's focus on data center operations and high-performance computing services [6].