The Company stated that negotiations with a prospective customer have advanced to a stage where management believes that Alliance Cloud Services, LLC ("ACS"), an indirect wholly owned subsidiary of Hyperscale Data, will enter into a master services agreement to provide colocation and related data center services (the "Services") for AI compute deployments in the coming weeks. As these Services become available, the Company will likely cease all Bitcoin mining operations at the Michigan Campus over several months so that it can focus its available power capacity on these higher margin Services. If the agreement under negotiation is executed, it is expected that the first 10 megawatts ("MWs") would be operational within 90 days followed by an additional 10 MWs 90 days thereafter.

ACS expects to provide approximately 20 MWs of critical power capacity this year for one potential customer. Agreements of this nature, many of which have a term, including renewal options, of up to 20 years, will typically generate in excess of $1 billion in revenue over a 20-year period. Additionally, ACS intends to deliver an additional approximately 32 MWs of critical power capacity during 2028, and anticipates that such additional power will also be taken by the potential customer. Over a 20-year term, the increased capacity is expected to generate an additional approximately $1.5 billion in total revenue. Accordingly, 52 MWs of total critical power capacity could generate an aggregate of approximately $2.5 billion in total revenue over a 20-year term.

Hyperscale Data believes the Michigan Campus may support significant phased expansion opportunities over time, subject to regulatory approvals, financing, infrastructure availability, engineering studies, utility agreements and other factors. Management believes the Michigan Campus has the potential to support more than 300 MWs of total power capacity.

If the Company proves able to increase the total power capacity at the Michigan Campus to 300 MWs or more, the approximately 20 MWs of power deployment currently under discussion would utilize less than 7% of that total potential capacity. In addition, if the potential customer elects to expand its power consumption to approximately 52 MWs, that would represent no more than 17% of the Michigan Campus' potential total power capacity, leaving the majority of such power capacity available for future growth opportunities.

Management believes this highlights the significant embedded long-term value of the Michigan Campus as a scalable AI infrastructure platform. However, there can be no assurance that the Company will be able to develop, finance, contract for, or otherwise realize all or any portion of such additional capacity.

The Michigan Campus currently supports existing digital infrastructure operations, which management believes provide a foundation for the continued development of additional AI compute capacity. The Company believes that the investment it has made in its Michigan Campus to provide scalable power infrastructure has positioned it to serve the growing needs of AI compute and IT infrastructure demand.

The Company cautions you that these expansion concepts remain preliminary and subject to numerous risks and uncertainties, and there can be no assurance that any expansion capacity will ultimately be available, developed, financed, approved, economically viable or otherwise initiated or continued.

"We are confident in our prospects and believe we will have significant updates for stockholders in the coming days and weeks," said Will Horne, the Company's Chief Executive Officer. "We continue to believe our Michigan Campus is positioned to offer top of the line AI compute environments as we continue to make progress with the installation of key infrastructure to support potential customers."

The Company further noted that while negotiations remain ongoing and no definitive agreements have been finalized, management believes the level of customer engagement validates both the strategic value of the Michigan Campus and the growing demand for scalable AI infrastructure in the United States.