Woofun AI reports that Hyperscale Data eliminated its immediate collateral exposure by liquidating Bitcoin to repay loans on the decentralized lending protocol Morpho. This strategic asset disposal resolved the company's outstanding debt obligations, though it did not address broader liquidity constraints.

The transaction, detailed in a quarterly filing for August 2026, involved the sale of 686 Bitcoin for approximately $43.4 million. Proceeds were applied to clear all Morpho borrowings, releasing pledged collateral that had included cbBTC with a carrying value of about $25.4 million against $16 million in debt as of June 30. Per Woofun AI, the company subsequently secured another $31.6 million in aggregate net proceeds from additional Bitcoin-backed borrowing through Morpho after the quarter ended.

Financial metrics reveal a strained balance sheet, with $36.8 million in cash and cash equivalents offset by $201.7 million in current liabilities as of June 30. For the first half of 2026, Hyperscale recorded a $49.1 million consolidated net loss and consumed $9.9 million of cash in operating activities. These figures underscore the capital intensity of its operations despite the recent debt clearance.

Looking ahead, the roughly 20-megawatt deployment at its Michigan AI data center is projected to require more than $100 million in investment over time. Financing availability will dictate the timing and scale of this build, leaving the company to navigate these obligations while operating under a going-concern warning.