Applied Digital Corporation Announces Proposed Private Offering of $300 Million of Convertible Notes

Core Viewpoint - Applied Digital Corporation plans to offer $300 million in convertible senior notes due 2030, subject to market conditions, to qualified institutional buyers under Rule 144A of the Securities Act [1][13]. Group 1: Offering Details - The company may grant initial purchasers an option to buy an additional $45 million in convertible notes within 13 days of the initial issuance [2]. - The convertible notes will be senior unsecured obligations, accruing interest payable semi-annually starting June 1, 2025, and maturing on June 1, 2030 [4]. - The notes will be convertible into cash, shares of common stock, or a combination, with specific terms to be determined at pricing [5]. Group 2: Use of Proceeds - A portion of the net proceeds will fund capped call transactions, and the company plans to repurchase up to one-third of the final aggregate principal amount of the convertible notes [3]. - Remaining proceeds will be used for general corporate purposes, with additional proceeds from any exercised options also allocated for capped call transactions [3]. Group 3: Market Impact and Hedging - The company expects to enter into a prepaid forward stock purchase transaction to facilitate derivative transactions, which may influence the market price of the common stock [6][7]. - Activities related to the prepaid forward and capped call transactions could lead to fluctuations in the market price of the common stock and the convertible notes [11][12]. Group 4: Company Overview - Applied Digital develops and operates next-generation data centers and cloud infrastructure, focusing on high-performance computing applications [15].