Applied Digital Secures $200M Debt Facility

Applied Digital Corporation (NASDAQ: APLD) has secured a private debt facility of up to $200 million to accelerate its high-performance computing (HPC) data center project in Ellendale, North Dakota. The company has received an initial commitment of $125 million to fund ongoing construction costs associated with its HPC campus, which can be upsized to $200 million upon mutual agreement by both parties. This financing completes the company's near-term capital needs and positions it to secure project-level financing to fund the remaining costs to complete the first HPC building.

The note issued for the commitments totaling $125 million at close includes an accordion feature that allows for up to an additional $75 million of borrowings, subject to mutual agreement. The financing provides the company with up to $200 million to be used solely towards the buildout of its HPC campus in Ellendale, ND.

The note will have a three-year term and bear interest at an initial rate of 12.0% per annum, payable quarterly in arrears. In connection with the financing, the lender will receive warrants for 6,300,449 shares of common stock of the company with a strike price of $4.8005 per share, and a warrant to purchase up to an additional 2,964,917 shares of common stock of the company at the same strike price, subject to the company meeting certain conditions.

Amidst the surging AI revolution, management believes Applied Digital is uniquely positioned to offer cutting-edge solutions in data centers and cloud as a service, strategically designed to maximize efficiency for HPC needs. The company aims to facilitate businesses in harnessing the transformative power of AI.

Simpson Thacher & Bartlett LLP acted as legal counsel to the lender, while Milbank LLP and Lowenstein Sandler LLP acted as legal counsel to the company.

Applied Digital Corporation (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. As a result of these announcements, the company's shares have moved -9.0% on the market, and are now trading at a price of $4.47. If you want to know more, read the company's complete 8-K report here.

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