Ault & Company, Inc. Announces Its Intention to Commence a Dutch Tender Offer to Acquire Approximately 111,000 Shares of Common Stock (Representing 10% of the Outstanding Common Stock) of Hyperscale Data, Inc.

Rhea-AI Summary

Ault & Company announces plans to initiate a cash tender offer to purchase up to 111,000 shares (10%) of Hyperscale Data's Class A Common Stock. The offer price will range between $7.50 and $10.00 per share, representing 50% to 100% premiums over the last reported price of $4.98 on December 5, 2024.

The purchase will be conducted through a modified Dutch auction. Ault & Company, along with its affiliates, currently owns approximately 85.7% of Hyperscale Data's outstanding shares. The offer is expected to commence in late December 2024 or early January 2025, subject to board and regulatory approvals.

Positive

• Premium offering price of $7.50-$10.00 represents 50-100% increase over current market price
• Strong backing from majority shareholder (85.7% ownership) indicates confidence in the company

Negative

• Tender offer could reduce market float and stock liquidity
• Large ownership concentration (85.7%) by Ault & Company may limit minority shareholder influence

Insights

Financial Analyst

The proposed Dutch tender offer by Ault & Company to acquire 10% of Hyperscale Data's outstanding shares at a significant premium ($7.50 to $10.00 vs. current price of $4.98) signals strong confidence in the company's undervaluation. The premium range of 50% to 100% above market price is notably aggressive. However, with Ault & Company and affiliates already controlling 85.7% of shares through preferred stock and warrants, this move appears aimed at consolidating control while potentially providing an exit opportunity for minority shareholders. The tender's price range and timing suggest a strategic move to capitalize on current market conditions, though the success will depend on shareholder participation and market response when formally launched.

Legal Expert

This Dutch tender offer announcement carries significant regulatory implications. The structure allows shareholders to indicate their preferred selling price within the specified range, with the final purchase price determined by the lowest price that enables buying the desired share quantity. Key regulatory considerations include SEC filing requirements, compliance with tender offer rules and proper disclosure to shareholders. The delayed commencement until late December 2024 or early January 2025 suggests ongoing regulatory preparations. Given Ault & Company's substantial existing ownership and insider positions, careful scrutiny of fairness to minority shareholders and compliance with fiduciary duties will be essential. The conditional nature of the offer, subject to board and regulatory approvals, adds layers of complexity to the execution.

LAS VEGAS, Dec. 06, 2024 (GLOBE NEWSWIRE) -- Ault & Company, Inc. (“Ault & Company” or the “Purchaser”), today announced that it intends to initiate a cash tender offer to purchase up to 111,000 shares of Class A Common Stock, $0.001 par value per share (“Common Stock”), of Hyperscale Data, Inc., a Delaware corporation (the “Company”), at a price not greater than $10.00 nor less than $7.50 per share of Common Stock, net to the seller in cash, less any applicable withholding taxes and without interest (the “Offer”). The exact price will be determined through a modified Dutch auction described in the offering materials to be filed with the Securities and Exchange Commission (the “SEC”) upon commencement of the Offer.

The Purchaser intends to make this Offer because it believes the Company’s current stock price is below the Company’s long-term intrinsic value per share. The price of $10.00 and $7.50 per share of Common Stock represent approximately 100% and 50% increases, respectively, over the last reported sales price of the Common Stock of $4.98 on December 5, 2024 (the “Closing Price”), on the NYSE American.

The principal business of Ault & Company is investing in securities. Ault & Company, together with its affiliates (including, Milton C. Ault III, the Company’s Executive Chairman, William Horne, the Company’s Chief Executive Officer and Vice Chairman, Henry Nisser, the Company’s President, General Counsel and Director and Ken Cragun, the Company’s Chief Financial Officer), beneficially own approximately 85.7% of the Company’s outstanding shares of Common Stock, primarily through the ownership of Series C Convertible Preferred Stock and warrants to purchase Common Stock.

The Offer is expected to commence in late December 2024 or early January 2025 and is subject to Ault & Company board approval, regulatory approval and other customary closing conditions. Details regarding the offer and instructions for stockholders interested in participating will be provided in the Offer to Purchase and related documents, which will be filed with the SEC and distributed to the Company stockholders.

The Offer will not be made to any person in any jurisdiction in which either the Offer, or solicitation or sale thereof, is unlawful. This press release is for informational purposes only and shall not constitute an offer to buy or sell Common Stock or any other securities. Any solicitation of offers to buy the Common Stock will only be made pursuant to an Offer to Purchase and related materials to be sent to the Company stockholders on the commencement of the proposed Offer. Company stockholders should read such materials carefully when they become available because they will contain important information, including the terms and conditions of the Offer. The Offer documents will be available without charge at the SEC’s website at http://www.sec.gov and will be delivered without charge to all stockholders of the Company who so request it.

Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements generally include statements that are predictive in nature and depend upon or refer to future events or conditions, and include words such as “believes,” “plans,” “anticipates,” “projects,” “estimates,” “expects,” “intends,” “strategy,” “future,” “opportunity,” “may,” “will,” “should,” “could,” “potential,” “considering,” or similar expressions. Statements that are not historical facts are forward-looking statements. Forward-looking statements are based on current beliefs and assumptions that are subject to risks and uncertainties. Forward-looking statements speak only as of the date they are made, and Ault & Company undertakes no obligation to update any of them publicly in light of new information or future events other than as required by applicable law. Actual results could differ materially from those contained in any forward-looking statement as a result of various factors.

Ault & Company Investor Contact
ir@aultandcompany.com

FAQ

What is the price range for Ault & Company's tender offer for Hyperscale Data (GPUS) shares?

The tender offer price range is between $7.50 and $10.00 per share, representing a 50-100% premium over the December 5, 2024 closing price of $4.98.

How many shares of Hyperscale Data (GPUS) does Ault & Company plan to purchase?

Ault & Company plans to purchase up to 111,000 shares, representing 10% of Hyperscale Data's outstanding Common Stock.

When will Ault & Company's tender offer for Hyperscale Data (GPUS) shares begin?

The tender offer is expected to commence in late December 2024 or early January 2025, subject to board and regulatory approvals.

What percentage of Hyperscale Data (GPUS) does Ault & Company currently own?

Ault & Company and its affiliates currently own approximately 85.7% of Hyperscale Data's outstanding shares.