Form 4: Hyperscale Data Executive Chairman Milton C. Ault III Discloses Significant Preferred Stock and Warrant Acquisitions

Milton C. Ault III, Executive Chairman of Hyperscale Data, Inc., and Ault & Company, Inc. have disclosed the acquisition of Series G Convertible Preferred Stock and Series G Warrants totaling over $960,000 in stated value and 162,217 warrants, respectively, through indirect ownership.

Summary

• Milton C. Ault III, Executive Chairman and 10% owner of Hyperscale Data, Inc. (GPUS), along with Ault & Company, Inc., reported the acquisition of Series G Convertible Preferred Stock and Series G Warrants.
• A total of 960 shares of Series G Convertible Preferred Stock were acquired across three transactions on January 3, 2025, January 6, 2025, and April 10, 2025.
• Each share of Series G Convertible Preferred Stock has a stated value of $1,000.00, implying a total investment of $960,000 in preferred stock.
• These preferred shares are convertible into Common Stock at a variable conversion price, which was $1.0721 per share as of June 20, 2025, meaning each preferred share converts into approximately 932.75 shares of Common Stock.
• A total of 162,217 Series G Warrants were also acquired on the same dates, with an exercise price of $5.918 per warrant.
• The warrants are exercisable starting July 3, 2025, July 6, 2025, and October 10, 2025, and expire on January 3, 2030, January 6, 2030, and April 10, 2030, respectively.
• All reported securities are beneficially owned indirectly by Ault & Company, Inc., of which Milton C. Ault III is the Chief Executive Officer.

Sentiment

Score: 7

Explanation: The filing indicates a significant investment by the Executive Chairman and a major shareholder, Ault & Company, Inc., through convertible preferred stock and warrants. This suggests strong insider confidence and provides capital to the company. However, the future conversion of these securities will lead to dilution for existing common shareholders, and the variable conversion price introduces some uncertainty.

Positives

• Significant investment by an insider (Executive Chairman and 10% owner) indicates confidence in the company's future.
• The acquisition of convertible preferred stock and warrants provides capital to Hyperscale Data, Inc.

Negatives

• Potential future dilution for existing common shareholders upon conversion of preferred stock and exercise of warrants.
• The variable conversion price for preferred stock, which adjusts based on VWAP and can be lowered by future issuances, introduces uncertainty regarding the ultimate number of common shares issued.

Risks

• Dilution Risk: Future conversion of Series G Convertible Preferred Stock and exercise of Series G Warrants will increase the number of outstanding common shares, potentially diluting the ownership percentage and earnings per share of existing common shareholders.
• Conversion Price Volatility: The conversion price of the Series G Convertible Preferred Stock is subject to adjustment based on the volume weighted average price (VWAP) and can be lowered if the company issues common stock at a price lower than the then-current conversion price, which could lead to greater dilution.

Future Outlook

The document does not contain explicit forward-looking statements or guidance beyond the future exercisable and expiration dates of the warrants.

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."

Industry Context

This Form 4 filing indicates an insider's continued investment in Hyperscale Data, Inc., a company likely operating in the data center or high-performance computing sector, given its ticker 'GPUS'. Such investments by key executives and significant shareholders can signal confidence in the company's strategic direction and growth prospects within a rapidly expanding industry driven by demand for data processing and AI infrastructure.

Related Party Transactions

• The transactions involve Ault & Company, Inc., which is controlled by Milton C. Ault III, the Executive Chairman and a director of Hyperscale Data, Inc., making these related party transactions.

Stakeholder Impact

• Shareholders: Potential future dilution of common stock upon conversion of preferred shares and exercise of warrants. However, the capital infusion from the preferred stock sale could support company growth, potentially benefiting shareholders in the long term.
• Company (Hyperscale Data, Inc.): Receives capital from the sale of preferred stock, which can be used for operations, growth, or other strategic initiatives.

Next Steps

• Future conversions of Series G Convertible Preferred Stock into Common Stock.
• Potential exercise of Series G Warrants into Common Stock.

Key Dates

Recommendation

Keywords

Hyperscale Data Inc, GPUS, SEC Form 4, Insider Trading, Milton C. Ault III, Ault & Company Inc, Convertible Preferred Stock, Warrants, Equity Financing, Corporate Governance, Executive Chairman, 10% Owner, Dilution