Applied Digital Corporation announced it has entered into a private financing arrangement with institutional investors, providing the company with the right to sell up to $150 million of a newly created series of convertible preferred stock. This facility is designed to advance the development of its Ellendale multi-building High-Performance Computing (HPC) Campus.
The convertible preferred stock, with a stated value and purchase price of $1,000 per share, bears no preferred return or preferred dividends and will be sold at an original issue discount of four percent. The facility has a 36-month term, allowing Applied Digital to draw funds at its discretion in increments of $25 million, subject to certain conditions.
Applied Digital retains full control over the timing and amount of any sales, with no obligation to utilize the full $150 million available under the facility. The proceeds from these draws are planned to fund the development of the Ellendale HPC Campus and for general corporate purposes. The preferred stock is convertible into common stock at an initial price of the greater of 95% of the lowest daily VWAP for five trading days preceding conversion or $4.25, subject to adjustments.
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