Hyperscale Data Plans To Tokenize Up To 1,340,947 Shares Of Its 13.00% Series D Cumulative Redeemable Perpetual Prefs, Implying ~$33.5M In Potential Gross Proceeds At Assumed Offer Price Of $25.00/Share; Reaffirms FY27 Guidance

The Company intends to use the net proceeds primarily to finance the continued development, construction and expansion of its Michigan AI data center campus, including power distribution, cooling systems, utility improvements and customer deployment infrastructure and potentially for working capital purposes.

The proposed initiative would be expected to create an additional financing channel for the Company by bringing an established, publicly traded preferred security to eligible investors through digital securities platforms in the United States and international markets.

An Established Preferred Security

The Series D Preferred Stock trades on the NYSE American under the symbol GPUS PD and carries a 13.00% annual cumulative dividend based on its $25.00 per-share liquidation preference, equivalent to $3.25 annually or approximately $0.2708333 monthly per share. The Company has reported 52 timely consecutive monthly dividend payments since the security was first issued in June 2022. Dividends are payable when declared by the Board of Directors, and historical payments do not guarantee future dividends. The security is perpetual and has no stated maturity.

The Company expects the tokens to represent interests in the underlying Series D Preferred Stock, with its economic and legal rights preserved under the final structure. Implementation would be pursued through appropriate securities-market participants, technology providers, custody arrangements and transfer infrastructure, subject to applicable securities laws and jurisdictional restrictions. No specific exchange, trading venue or international listing arrangement has been finalized.

Financing Structure and Common Share Considerations

The contemplated offering would issue Series D Preferred Stock rather than Class A common stock. Because the Series D Preferred Stock is not convertible into Class A common stock except in extremely limited and exceptional circumstances, the Company does not expect this financing to result in additional Class A common shares at issuance or through ordinary conversion thereafter. This statement relates solely to the contemplated offering and does not preclude future issuances of Class A common stock in other financings or transactions.

Additional preferred stock would increase the Company's preferred dividend obligations and liquidation preferences and could reduce cash flow available to the Company and its common stockholders. Management intends to evaluate those obligations against anticipated operating cash flow, existing commitments and capital expenditure requirements.

Financial Outlook Supports Evaluation of Series D Financing

Hyperscale Data previously announced consolidated financial guidance for the year ending December 31, 2027, projecting revenue of approximately $300 million to $350 million and Adjusted EBITDA of approximately $60 million to $80 million.

Management believes its Adjusted EBITDA outlook supports evaluating additional Series D Preferred Stock financing, as anticipated growth in operating profitability could help sustain the associated preferred dividend obligations while funding long-term infrastructure investment. In assessing the amount and timing of any financing, the Company intends to consider expected cash generation, existing obligations, liquidity needs and capital expenditure requirements. The guidance is preliminary and reflects management's expectations regarding future business performance. Adjusted EBITDA is a non-GAAP measure and does not represent cash flow available for preferred dividend payments or assure the Company's ability to pay those dividends.

The Company cannot provide a quantitative reconciliation of its projected Adjusted EBITDA to the most directly comparable measure calculated under GAAP, which in this case would be net income or loss, because certain components required to calculate net income or loss cannot presently be reasonably estimated without unreasonable effort. These components include future interest expense, income taxes, depreciation and amortization, stock-based compensation, impairment charges, acquisition-related expenses and changes in the fair value of financial instruments. These items are likely to be material to the Company's future GAAP results.

The Company intends to provide further updates on the timing, structure, implementation and distribution arrangements for the proposed offering. There can be no assurance that the offering will be completed, that the full contemplated amount will be raised or that a secondary trading market for the tokenized securities will develop.