Hyperscale Data, Inc. 2026 Q2 Earnings Call

Joe and Gary, am I free to start?

Yep. Okay. Good afternoon, everybody.

I'm Milton Ault III, and I go by Todd. Today we have Will Horne, the actual CEO of Hyperscale Data. I know that many people confuse me as the CEO. I am not. I'm the Executive Chairman. Will and I have been together for more than 20 years. We have Ken Cragun, the CFO, who I'm super excited is here. Ken has an enormous amount of public company reporting experience and has been with us for a long time, many, many years, I think more than half a decade, maybe longer than that. We have Jay Looney, the President of the data center business in Michigan, Alliance Cloud Services. In the background there that will be joining us, the Chief Technology Officer of Hyperscale Data, Joe Spaziano, who's been with us for 20 years.

I thought it was important today to really bring the team together as this is a long culmination of us trying to figure out how we're going to grow the company, and we're pretty proud together that we're going to try to accomplish a $300 million-$350 million enterprise next year. It's taken a lot of work. As you guys know, before we read these forward-looking comments, I'll say this. Building a small-cap holding company is like driving a car down the road where you have to lay the asphalt and the concrete to make the road. It is not an easy challenge.

It is quite difficult and as many shareholders have experienced, like myself and Will and the whole team, quite volatile being a small cap company that has to raise capital in an environment that is such a difficult thing, being so small as a holding company. Joe, could you do me a favor and read the forward-looking statements? Joe, the most important thing is you can just read down to the second paragraph.

Cautionary statements regarding forward-looking statements. This presentation and other written, oral statements and communications made from time to time by representatives of Hyperscale Data, Inc., Hyperscale Data or the company contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933. As amended, the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended, the Exchange Act. Forward-looking statements reflect the current view about future events, and they are not guarantees of assurance of future performance. Statements that are not historical in nature, such as forecasts for the industries in which the company and its subsidiaries operate, and which may be identified by the use of words like "accept," "assume," "project," "anticipate," "estimate," "believe," "could be," "future," "intend," "plan," "guidance," "potential," "forecast," "target," or the negative of these terms, and any other words similar meaning are forward-looking statements.

Such statements include, but are not limited to, statements contained in this presentation relating to the business strategy, expansion, growth, products, and services that may be offered in the future, and the timing of their development, sales, and marketing strategy, and capital outlook of the company and its subsidiaries. Forward-looking statements are based on management's current expectations and assumptions regarding the company's business, the economy, and other future conditions are subject to inherent risks, uncertainties, and changes of circumstances that are difficult to predict and may cause actual results to differ materially from those contemplated or expressed. Hyperscale Data cautions the reader, therefore, against relying on any of these forward-looking statements.

These risks and uncertainties include those risk factors discussed under the heading Risk Factors in the company's filing with the Securities and Exchange Commission, the SEC, including the company's most recent annual report on Form 10-K and subsequent quarterly reports on Form 10-Q and other filings, each of which is available on the company's website and on the SEC's website at www.sec.gov. Any forward-looking statements made in this presentation speaks only as of the date of the presentation. All forward-looking statements are qualified in their entries by referencing the risk factors discussed in the company's SEC filings. This cautionary statement regarding forward-looking statements should be one or more of these risks or uncertainties materialize, or in certain cases, fail to materialize, or should the underlying assumptions prove incorrect, actual results may differ significantly from those anticipated, believed, estimated, expected, intended, or planned.

Perfect. Thanks, Joe. Yep. Let's go to the next slide.

Obviously, what we're going to talk about to do is the executive overview, the organizational chart, the key drivers around why we think EBITDA is going to appear in 2027. We're going to talk about Ault Capital Group, the lending and financial services and digital outlook, and try to bifurcate for everyone that we have a portfolio company, a group of portfolio companies. One example of this is I never hear anyone talk about the crane company, right? We own a crane company in Texas, about 140 employees generating just under $50 million in revenue and about $10 million to $12 million of EBITDA, and this is because we started out as a holding company.

Upfront, I want to say to people, there's a lot of outlook around the name changes and the things we've had over the last nine years, and unfortunately, there's probably some poor decisions have been made by myself. I don't blame anyone else for that. Around the idea that when we were Bitcoin miners, it became very difficult to operate as a public company. For a long period of time, we can't remember back, but just not too long ago, we were being debanked multiple times, and it was a really difficult outlook. We're going to try to summarize for everyone where we are today, and we're going to focus on where we are right now and where we think we're going to be over the next 18 months. If we could go forward with this slide, that'd be great. Okay, let's continue. All right.

The bulk of what we're going to talk about today is two basic businesses, which is Hyperscale Data proper and Alliance Cloud Services, which is part of Hyperscale Data, owned by Hyperscale Data, Omnipresent Robotics, and the MSA contract with the California neocloud provider. If those of you who don't know and understand the structure of the company properly, we do have a 617,000 sq ft data center in Michigan, 30 MW live and energized, and we've been mining Bitcoin there for many years. I think we're close to five years of mining Bitcoin there. We have a targeted program to get to 300 MW.

Of course, recently that we signed that master services agreement, this puts us in a great spot because 20 megawatts of critical, which we're going to have Jay Looney talk about today, that Jay and Will were smart enough to start ordering equipment last year, knowing and anticipating that we thought this was finally going to happen. We've commented before that we had a chance to consider doing deals for the data center, and we always thought that we were being undercut by that. Now we feel very comfortable and have added space. If you see here some of the things we'll talk about, the business model, data center colocation, which is through Sentinum and ACS, digital treasury mining, and robotics. The Michigan Data Center, 617,000 sq ft, 30 megawatts.

The MSA, which I want to point out to everyone, if the entire MSA is fully used, I think, Will, you would comment that isn't the entire MSA, if we use the full MSA, which is 52 megawatts, we're going to be around 17% of the data center, or what exactly what percentage will we be if we did the full MSA for $3 billion?