SCHEDULE: Ault & Co. Boosts Hyperscale Data Stake to 35.54%

Ault & Company, Inc. and Milton C. Ault, III have increased their beneficial ownership in Hyperscale Data, Inc. to approximately 35.54% and 35.55% respectively, primarily through preferred stock conversions and recent share purchases.

Summary

• Ault & Company, Inc. and Milton C. Ault, III have significantly increased their beneficial ownership in Hyperscale Data, Inc.
• Ault & Company now beneficially owns 177,945,830 Class A Shares, representing 35.54% of the class.
• Milton C. Ault, III beneficially owns 177,971,101 Class A Shares, representing 35.55% of the class, including shares held by Ault & Company.
• This ownership includes direct Class A shares, Class A shares issuable upon conversion of Class B shares, Series C, G, and H Convertible Preferred Stock, and warrants.
• The calculation for preferred stock conversions in this filing is based on a conversion price of $0.324 per Class A share.
• Ault & Company's total voting power is 26.49%, and Mr. Ault's is 26.50%, reflecting the 10-vote per share for Class B stock and specific conversion price rules for voting.
• Ault & Company has invested $50,000,000 for Series C Preferred Stock, $960,000 for Series G Preferred Stock, and $4,000,000 for Series H Preferred Stock.
• Recent purchases by Ault & Company include 205,656 Class A shares at $0.2372 on November 18, 2025, and 50,000 Class A shares at $0.229 on November 19, 2025.
• Milton C. Ault, III also made several Class A share purchases in September and November 2025, including 3,800 shares at $0.2363 on November 18, 2025.
• Both Ault & Company and Mr. Ault received Class B shares as stock dividends on October 31, 2025.

Sentiment

Score: 4

Explanation: While Ault & Company's increased stake and significant investment show confidence, the inability of Hyperscale Data, Inc. to convert preferred shares due to insufficient authorized stock and NYSE American limitations, coupled with recent share purchases at prices below the preferred stock conversion basis, indicates underlying operational or governance challenges that could negatively impact shareholder value.

Positives

• Significant investment by Ault & Company ($54.96 million in preferred stock) demonstrates strong conviction in Hyperscale Data, Inc.
• Increased beneficial ownership by Ault & Company and Milton C. Ault, III indicates a strengthening of insider control and alignment of interests.
• Repayment of the $17.5 million Senior Secured Convertible Promissory Note suggests improved financial health or strategic capital management.

Negatives

• Ault & Company has provided a waiver temporarily prohibiting the conversion of Series C, G, and H Preferred Stock until Hyperscale Data, Inc. has sufficient authorized but unissued Class A Common Stock, indicating a potential share authorization issue.
• NYSE American limitations prevent the conversion of 7,277,458 Class A shares from Series H Preferred Stock without stockholder approval, which could limit Ault & Company's ability to fully realize its equity stake immediately.
• The conversion price of $0.324 for preferred stock, compared to recent purchase prices (e.g., $0.2372, $0.229), suggests that the preferred stock was acquired at a higher effective price per Class A share than the current market price, potentially indicating a decline in share value since the preferred stock issuance.

Risks

• Share Authorization Risk: The company currently lacks sufficient authorized Class A Common Stock to allow full conversion of Ault & Company's Series C, G, and H Preferred Stock, requiring a waiver and potentially future stockholder approval.
• Regulatory Conversion Limitations: NYSE American rules restrict the conversion of 7,277,458 Series H Preferred Stock shares without stockholder approval, which could delay or prevent Ault & Company from fully converting its holdings.
• Dilution Risk: Future authorization and conversion of preferred stock and warrants will significantly increase the number of outstanding Class A shares, potentially diluting existing shareholders.
• Market Price Volatility: The conversion prices for preferred stock are tied to the volume-weighted average price, introducing sensitivity to market fluctuations.

Future Outlook

The filing indicates that Ault & Company has provided a temporary waiver to Hyperscale Data, Inc., prohibiting the conversion of Series C, G, and H Preferred Stock until the company has a sufficient number of authorized but unissued Class A Common Stock shares. This suggests a future need for the company to address its authorized share count to facilitate these conversions.

Management Comments

• Ault & Company has permitted the Company to temporarily unreserve all shares of Class A Common Stock issuable upon conversion of the Series C Preferred Stock, Series G Preferred Stock and Series H Preferred Stock and prohibit the conversion by Ault & Company of the Series C Preferred Stock, Series G Preferred Stock and Series H Preferred Stock, until such time as the Company has a sufficient number of authorized but unissued shares of Class A Common Stock to permit the conversion of the Series C Preferred Stock, Series G Preferred Stock and Series H Preferred Stock in full.
• The waiver does not prohibit Ault & Company from voting the shares of Series C Preferred Stock, Series G Preferred Stock and Series H Preferred Stock in accordance with their terms.

Industry Context

This filing reflects a significant increase in a major investor's stake in Hyperscale Data, Inc., a common occurrence in companies undergoing strategic shifts or facing capital needs. The complexities around preferred stock conversion and authorized share limits highlight potential governance challenges that can arise in growth-oriented or financially constrained companies, often requiring careful management of capital structure and shareholder relations.

Corporate Governance

Related Party Transactions

• Ault & Company, Inc. and Milton C. Ault, III are related parties to Hyperscale Data, Inc.
• Ault & Company purchased significant amounts of Series C, G, and H Preferred Stock from the Issuer.
• Ault & Company received warrants in connection with a Senior Secured Convertible Promissory Note from the Issuer.
• Milton C. Ault, III and Henry C.W. Nisser received Class A Shares upon vesting of restricted stock units in their capacity as officers and directors.
• Ault & Company and Milton C. Ault, III received Class B Shares as stock dividends from the Issuer.

Stakeholder Impact

• Shareholders: Potential dilution from future preferred stock and warrant conversions. Current shareholders may be concerned about the company's inability to authorize sufficient shares for conversion. The significant insider stake could be seen as both a positive (alignment) and a negative (concentration of power).
• Ault & Company: Their ability to fully convert preferred stock is temporarily restricted, but their voting power remains intact. They have a substantial financial commitment to the company.
• Management/Board: The need to address authorized share count and NYSE American limitations indicates a governance challenge that management and the board must resolve.

Next Steps

• Hyperscale Data, Inc. needs to address the issue of insufficient authorized Class A Common Stock to allow for the full conversion of Ault & Company's preferred shares.
• The company may need to seek stockholder approval to convert the 7,277,458 shares of Series H Preferred Stock due to NYSE American limitations.

Key Dates

Recommendation

While the substantial investment and increased beneficial ownership by Ault & Company and Milton C. Ault, III signal strong insider confidence, the underlying issues regarding insufficient authorized shares for preferred stock conversion and NYSE American limitations present significant operational and governance hurdles. The recent share purchases at prices below the preferred stock conversion basis also raise concerns about current valuation relative to prior investments. Investors should hold and monitor how Hyperscale Data, Inc. addresses these share authorization and conversion challenges before making further investment decisions.

Keywords

Hyperscale Data, Ault & Company, Milton C. Ault III, Schedule 13D, Beneficial Ownership, Class A Common Stock, Preferred Stock Conversion, Warrants, Corporate Governance, Shareholder Stake, SEC Filing, Stock Dividend