Applied Digital Corporation (NASDAQ: APLD)$BTC $ALT a leading provider of high-performance computing (HPC) infrastructure, has entered into a private financing arrangement with institutional investors, securing a $150 million convertible preferred equity facility. This strategic move aims to accelerate the development of its Ellendale HPC data center campus.
Key Terms of the Facility:
Convertible Preferred Stock: The facility involves the issuance of convertible preferred stock with a stated value and purchase price of $1,000 per share.
Original Issue Discount: The shares will be sold at an original issue discount of four percent.
No Preferred Return or Dividends: The preferred stock bears no preferred return or preferred dividends.
Draw Terms: The company has the right, but not the obligation, to sell up to $150 million of the convertible preferred stock to the investors over a 36-month period. Draws can be made in increments of $25 million at the company's discretion, with no minimum commitments or penalties for non-use.
Use of Proceeds: The funds will be utilized for the development of the Ellendale HPC campus and general corporate purposes.
Strategic Implications:
This facility provides Applied Digital with the flexibility to access capital as needed, enabling the company to progress the build-out of its second data center while nearing completion on the first. The Ellendale campus is poised to enhance the company's capabilities in providing cutting-edge HPC solutions, catering to the growing demand in sectors such as artificial intelligence, blockchain, and scientific research.
