Applied Digital Issues $50 Million Unsecured Convertible Debenture to Advance HPC Data Center Project in Ellendale, North Dakota
01 Abril 2024 - 9:05AM
Applied Digital Corporation (Nasdaq: APLD) ("Applied Digital" or
the "Company"), a designer, builder, and operator of
next-generation digital infrastructure designed for
High-Performance Computing (“HPC”) applications, announced that the
Company recently entered into a private financing agreement with a
single investor (the “Investor”), in which it issued a $50 million
unsecured convertible debenture. The convertible debenture bears no
interest, has an original issue discount of five percent and has a
term of 54 weeks. The conversion price for the note is the lower
(a) $6.00 and (b) 95% of the lowest daily volume weighted average
price of the Company’s common stock during the five trading days
immediately prior to the date of conversion, subject to a floor
price of $3.00, except that the Investor may, at its option, elect
to use the $6.00 fixed conversion price. The Investor is limited to
converting no more than $9.0 million per month, and may only begin
to convert after May 1, 2024, except that these limitations do not
apply if there’s an event of default and the conversion price is
set at $6.00. Subject to the Investor’s right to convert, the
Company may prepay the note at any time that the Company’s common
stock trades below $6.00 or the tenth trading day after the
registration statement registering the resale of the note’s
underlying shares becomes effective. The Investor has contractually
agreed not to short the stock during the term of the note.
“We intend to use the net proceeds from the
private financing, supplemented by the proceeds from our announced
sale of the Garden City facility, to finance substantial
advancements in our construction phase of the HPC data center in
Ellendale, North Dakota. Concurrently, we continue negotiating our
project-level financing to ensure timely project completion and
fulfillment of our contractual obligations,” said Applied Digital
CFO David Rench.
Northland Capital Markets acted as advisor and
sole placement agent for the Company on the financing. Lowenstein
Sandler LLP acted as legal counsel to the Company.
The securities described above (including any
securities issuable pursuant to the conversion provisions of the
convertible debenture) have not been registered under the
Securities Act of 1933, as amended, and may not be offered or sold
in the United States absent registration or an applicable
exemption from registration requirements. The Company has agreed to
file a resale registration statement with the SEC for
purposes of registering the resale of the shares of common stock
issuable in connection with the offering.
This press release shall not constitute an offer
to sell or the solicitation of an offer to buy, nor may there be
any sale of any securities in any state or jurisdiction in which
such offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities laws of any such
state or jurisdiction.
About Applied DigitalApplied
Digital (Nasdaq: APLD) designs, develops, and operates
next-generation data centers across North America to provide
digital infrastructure solutions to the rapidly growing
high-performance computing (HPC) industry. Find more information at
www.applieddigital.com. Follow us on X (formerly Twitter) at
@APLDdigital.
Forward-Looking Statements
This release contains "forward-looking
statements" as defined in the Private Securities Litigation Reform
Act of 1995 regarding, among other things, future operating and
financial performance, product development, market position,
business strategy and objectives. These statements use words, and
variations of words, such as "continue," "build," "future,"
"increase," "drive," "believe," "look," "ahead," "confident,"
"deliver," "outlook," "expect," “intend,” “hope,” “project” and
"predict." Other examples of forward-looking statements may
include, but are not limited to, (i) statements of Company plans
and objectives, including advancement in our construction phase of
the HPC data center in Ellendale, North Dakota, our evolving
business model and a shift in our business strategy towards our HPC
data centers, or estimates or predictions of actions by suppliers,
(ii) statements of future economic performance, and (iii)
statements of assumptions underlying other statements and
statements about the Company or its business. You are cautioned not
to rely on these forward-looking statements. These statements are
based on current expectations of future events and thus are
inherently subject to uncertainty. If underlying assumptions prove
inaccurate or known or unknown risks or uncertainties materialize,
actual results could vary materially from the Company's
expectations and projections. These risks, uncertainties, and other
factors include: decline in demand for our products and services;
the volatility of the crypto asset industry; the inability to
comply with developments and changes in regulation; cash flow and
access to capital; and maintenance of third-party relationships.
Information in this release is as of the dates and time periods
indicated herein, and the Company does not undertake to update any
of the information contained in these materials, except as required
by law.
Investor Relations ContactsMatt Glover or Alex
KovtunGateway Group, Inc.(949) 574-3860APLD@gateway-grp.com
Media ContactBrenlyn Motlagh or Diana Jarrah
Gateway Group, Inc.(949) 899-3135APLD@gateway-grp.com
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