Form 4: Executive Chairman's Entity Significantly Boosts Stake in Hyperscale Data, Inc. Following Reverse Stock Split

Milton C. Ault III, Executive Chairman of Hyperscale Data, Inc., and his entity Ault & Company, Inc., have substantially increased their beneficial ownership through acquisitions of convertible preferred stock, warrants, and Class B common stock, following a 1-for-35 reverse stock split.

Summary

• Milton C. Ault III, Executive Chairman and 10% owner of Hyperscale Data, Inc. (GPUS), along with Ault & Company, Inc. (also a 10% owner), reported multiple acquisitions of Series C Convertible Preferred Stock, Series C Warrants, and Class B Common Stock.
• Between October 4, 2024, and December 20, 2024, Ault & Company, Inc. acquired a total of 5,700 shares of Series C Convertible Preferred Stock, bringing their total beneficial ownership to 50,000 shares.
• Each Series C Convertible Preferred Stock share has a stated value of $1,000 and is convertible into approximately 932.75 shares of Common Stock, based on a conversion price of $1.0721 per share as of June 20, 2025.
• During the same period, Ault & Company, Inc. acquired a total of 48,145 Series C Warrants, increasing their total beneficial ownership to 422,337 warrants.
• These warrants have an exercise price of $118.3875 and various expiration dates ranging from October 2029 to December 2029.
• On December 16, 2024, Ault & Company, Inc. received 4,234,561 shares of Class B Common Stock as a stock dividend from the Issuer.
• The Class B Common Stock carries 10 times the voting power of Class A Common Stock.
• All reported price and ownership figures have been adjusted to reflect a 1-for-35 reverse stock split that occurred on November 22, 2024.

Sentiment

Score: 6

Explanation: The filing indicates significant insider buying of convertible preferred stock, warrants, and Class B common stock, which generally signals confidence. However, the context of a 1-for-35 reverse stock split and the complex nature of the acquired securities (potential future dilution) temper the overall positive sentiment.

Positives

• Increased insider ownership by Milton C. Ault III and Ault & Company, Inc. suggests confidence in the company's future prospects.
• The acquisition of Series C Convertible Preferred Stock and Warrants indicates a capital infusion into Hyperscale Data, Inc.

Risks

• Potential dilution for existing common shareholders upon conversion of the Series C Convertible Preferred Stock and exercise of Series C Warrants.
• The occurrence of a 1-for-35 reverse stock split on November 22, 2024, often indicates a low share price and can be a risk factor for investor perception and liquidity.

Future Outlook

NA

Management Comments

• "Milton C. Ault, III, is the Chief Executive Officer of Ault & Company, Inc. ('Ault & Co.') and is deemed to beneficially own the shares held by Ault & Co."
• "Mr. Ault, Chief Executive Officer of Ault & Co., is a director of the Issuer."
• "For purposes of Section 16 of the Exchange Act, Ault & Co. may be deemed a director by deputization by virtue of its representation on the Board of Directors of the Issuer."
• "Each share of Class B Common Stock carries 10 times the voting power of a share of Class A Common Stock."

Industry Context

NA

Corporate Governance

Related Party Transactions

• Acquisition of Series C Convertible Preferred Stock, Series C Warrants, and Class B Common Stock by Ault & Company, Inc., an entity where Milton C. Ault III (Executive Chairman and Director of Hyperscale Data, Inc.) serves as Chief Executive Officer.
• Milton C. Ault III is deemed to beneficially own the shares held by Ault & Company, Inc.
• Ault & Company, Inc. may be deemed a director by deputization, further solidifying the related party nature of these transactions.

Stakeholder Impact

• Shareholders: Potential for dilution of common stock upon conversion of preferred stock and exercise of warrants. Increased voting power for Class B Common Stock holders (Ault & Company, Inc.) could impact corporate control and governance.
• Company (Hyperscale Data, Inc.): Receives capital infusion from the sale of preferred stock and warrants.

Key Dates

Keywords

Hyperscale Data, GPUS, SEC Form 4, Insider Ownership, Milton C. Ault III, Ault & Company Inc., Convertible Preferred Stock, Warrants, Class B Common Stock, Reverse Stock Split, Beneficial Ownership, Corporate Governance