Applied Digital Enters Into a $150 Million Convertible Preferred Equity Facility to Advance Development of Ellendale Multi-Building HPC Campus

Core Viewpoint - Applied Digital Corporation has entered into a private financing arrangement allowing it to sell up to $150 million of convertible preferred stock to institutional investors, aimed at funding the development of its Ellendale High Performance Computing data center campus [1][2]. Financing Arrangement - The convertible preferred stock has a stated value of $1,000 per share, with no preferred return or dividends, and will be sold at a 4% discount [2]. - The financing facility has a term of 36 months, allowing the company to draw funds in increments of $25 million at its discretion, subject to certain conditions [2]. - The company retains control over the timing and amount of sales, with no obligation to utilize the full $150 million available [2]. Use of Proceeds - Proceeds from the financing will be used to fund the development of the Ellendale HPC Campus and for general corporate purposes [2]. Conversion and Ownership Restrictions - The preferred stock is convertible into common stock at an initial price based on the lower of 95% of the lowest daily VWAP for the five trading days before conversion or $4.25, with adjustments as specified [3]. - There is a beneficial ownership cap of 4.99% of the company's outstanding common stock and a 19.99% blocker provision to comply with NASDAQ Listing Rules [3]. Company Background - Applied Digital develops, builds, and operates next-generation data centers and cloud infrastructure, focusing on high-performance computing applications [6]. - The company aims to support demanding workloads in AI, machine learning, and blockchain through its purpose-built facilities [6]. Executive Commentary - The CEO of Applied Digital expressed satisfaction with the financing facility, highlighting its role in advancing the development of the Ellendale HPC Campus and the construction of the company's second data center [4].