Applied Digital Issues Unsecured Convertible Debenture to Advance HPC Data Center Project in Ellendale, North Dakota
May 24 2024 - 4:13PM
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 $42,131,579
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) $8.00 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. Below $8.00, the
Investor is limited to converting no more than $16.0 million per
month in the aggregate across all convertible debentures held by
the Investor, which is roughly five percent of the previous thirty
days value traded or less than two days of liquidity. 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 $8.00 or the
thirtieth 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.
“The net proceeds from the private financing
will be strategically utilized to finance substantial advancements
in the construction phase of our HPC data center in Ellendale,
North Dakota. This underscores our commitment to project
advancement and timely fulfillment of our contractual obligations.
We are also actively negotiating our project-level financing to
ensure the project's timely completion,” explained Applied Digital
CFO David Rench.
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 StatementsThis
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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