PART I – FINANCIAL INFORMATION Item 1. Financial Statements 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 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 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 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 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 capital3437 - 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 2024484951 - 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 current8085 - 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 & Company136139 Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) 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 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 price175 - 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 compensation186208 - 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 notes214218219 Liquidity and Capital Resources 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 $21.3 million in restricted cash222 Cash Flow Summary (Six Months Ended June 30, 2025) | Cash Flow Activity | Amount ($) | | :--- | :--- | | 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 stock227 Quantitative and Qualitative Disclosures about Market Risk 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 company229 Controls and Procedures 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, 2025231 - 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 assets233234 - Remediation efforts include engaging third-party specialists, implementing new systems, and increasing headcount with internal control expertise235238 PART II – OTHER INFORMATION Legal Proceedings 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 ROI242243 - 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 condition248 Risk Factors 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, 2024251 Other Information (Items 2, 3, 4, 5) 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 Information252253255 - Item 4, Mine Safety Disclosures, is not applicable to the company254 Exhibits 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 2025258
Hyperscale Data, Inc.(GPUS) - 2025 Q2 - Quarterly Report