Hyperscale Data Repurposes Bitcoin Strategy to Accelerate Michigan AI Data Center

Company Deploys Portion of Bitcoin Treasury and Establishes Bitcoin-Backed Credit Facility to Fund AI Infrastructure While Enhancing Financial Flexibility and Reducing Potential Stockholder Dilution

Hyperscale Data, Inc. an artificial intelligence (“AI”) data center company anchored by Bitcoin (“Hyperscale Data” or the “Company”), today announced the repurposing of its Bitcoin treasury strategy through the selective deployment of a portion of its Bitcoin holdings and the establishment of a Bitcoin-backed credit facility to help fund the continued development of its Michigan AI data center campus (the “Michigan Campus”).

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Management has concluded that the continued development of the Michigan Campus represents one of the Company’s highest-priority long-term capital investment opportunities. Hyperscale Data believes that selectively redeploying a portion of the cash underlying its Bitcoin treasury into the Michigan Campus has the potential to create greater long-term stockholder value while preserving meaningful exposure to Bitcoin through the Company’s remaining treasury holdings.

Accordingly, Hyperscale Data has begun utilizing a portion of its Bitcoin treasury to finance construction of the Michigan Campus and acquire critical infrastructure as well as long-lead equipment necessary to support the Company’s previously announced master services agreement (the “MSA”) with a leading neo-cloud AI infrastructure provider. The MSA has an initial term of 10 years with two five-year extension options that may be exercised by the customer (collectively, the “Maximum Term”) and initially contemplates approximately 20 megawatts (“MW”) of critical AI compute capacity. If exercised for the Maximum Term, the MSA is expected to generate in excess of $1.2 billion in revenue.  The MSA also provides the customer with a right to an additional 32 MW of critical AI compute capacity which, if exercised within the first two years of the initial term and continues through the two five-year extension options, would be expected to result in total contract revenue in excess of $3.0 billion.

As part of this initiative, the Company has monetized approximately 100 Bitcoin, with the proceeds being invested directly into the development of the Michigan Campus.

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In addition, the Company has established a credit facility that allows it to borrow capital at variable interest rates, expected to range from approximately 4.5% to 5.0%, and to pledge Bitcoin as security for repayment of the loans. Management believes this shift in its strategy represents an attractive means of sourcing low-cost capital while preserving ownership of a substantial portion of the Company’s Bitcoin treasury.

The Company believes this capital allocation strategy provides several important benefits:

• Accelerates development of the Michigan Campus;
• Provides access to low-cost, non-equity capital through Bitcoin monetization and Bitcoin-backed borrowing;
• Reduces stockholder dilution by lowering reliance on third party short-term equity financing or onerous debt financing; and
• Converts digital assets into long-lived AI infrastructure expected to generate recurring cash flows.

Milton “Todd” Ault III, Executive Chairman of Hyperscale Data, stated, “We believe our Bitcoin treasury is one of the Company’s most valuable strategic assets. Through our Bitcoin mining operations and disciplined treasury management, Hyperscale Data recently announced that it had accumulated approximately $71 million in Bitcoin, creating a significant source of financial flexibility.

“We also believe that our Michigan Campus is another vital asset that will provide one of the most attractive long-term investment opportunities available to the Company.  Therefore, after carefully evaluating our capital allocation priorities, we concluded that accelerating development of our Michigan Campus is in the best interests of our stockholders. We have therefore begun selectively deploying a portion of our Bitcoin holdings to fund further development of the Michigan Campus and acquire the infrastructure necessary to support our previously announced long-term customer under the MSA.

“At the same time, we have established the ability to borrow capital at attractive variable interest rates by collateralizing our Bitcoin holdings. Together, these initiatives provide efficient access to capital while preserving substantial ownership of our Bitcoin treasury.  Given what we believe are the Company’s current market valuations, we believe selectively deploying Bitcoin and utilizing Bitcoin-backed financing represent more attractive sources of capital than relying primarily on issuing additional equity.”

William Horne, the Company’s Chief Executive Officer, said, “While we will continue evaluating all available financing alternatives as market conditions evolve and our capital requirements change, we believe this strategy has the potential to reduce future stockholder dilution while accelerating construction of our Michigan Campus.

“This decision does not constitute a change in our long-term conviction regarding Bitcoin. Instead, we believe it demonstrates the strategic value of maintaining a substantial Bitcoin treasury. A Bitcoin treasury is more than a passive balance sheet asset; it is a source of financial flexibility that allows us to efficiently allocate capital into opportunities we believe can create greater long-term stockholder value.

“By selectively monetizing and financing against a portion of our Bitcoin holdings, we are shifting one balance sheet asset for another. We believe that increasing our cash available to develop our AI infrastructure will generate significant long-term recurring cash flow, though we intend to maintain meaningful Bitcoin ownership and preserve our financial flexibility.”

The Company intends to continue evaluating the appropriate balance among holding Bitcoin, utilizing Bitcoin-backed financing and selectively deploying Bitcoin capital to support high-return strategic investments, subject to market conditions, capital requirements and broader corporate objectives.

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