Applied Digital (APLD) Issues $53.2M Convertible Preferred Stock

Applied Digital Corporation (Nasdaq: APLD) today announced it has entered into a private financing arrangement with a single investor (the “Investor”), pursuant to which the Company has issued $53.2 million in convertible preferred stock for net proceeds of $50 million.

“We are pleased to announce this transaction, which furthers our vision and supports key growth initiatives across our business,” said Wes Cummins, Chairman and CEO of Applied Digital. “We believe this additional capital will help us to accelerate our expansion plans and keep our current Ellendale HPC buildout on track as we finalize our long-term, hyperscaler lease, further solidifying our position as a leading owner and operator of purpose-built data centers to help drive the AI revolution.”

The convertible preferred stock has a stated value of $1,000 per share and bears interest at eight percent, payable in PIK or cash. The Investor has funded $50 million at closing and received 53,191 shares of the convertible preferred stock, with 3,191 of such shares representing a six percent original discount in the transaction. Upon receipt of shareholder approval, the preferred stock will become convertible into common stock of the Company at an initial conversion price of $7.00 per share (a premium of over 80% to Applied Digital’s latest common stock price), so long as the reset feature outlined within the definitive documents is not triggered. The Company plans to use the proceeds from this investment to fund various growth initiatives across its business segments.

Northland Capital Markets acted as the sole placement agent with respect to the transaction, and Lowenstein Sandler LLP served as the Company’s legal counsel.

The securities described above (including any securities issuable pursuant to the conversion provisions of the preferred stock) 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 Securities and Exchange Commission 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 before registration or qualification under the securities laws of any such state or jurisdiction.

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