Lowenstein Sandler PC

09/10/2024 | Press release | Distributed by Public on 09/11/2024 07:31

Lowenstein Represents Applied Digital, Designer of Next Generation Digital Infrastructure for HPC and AI Workloads, in Three Multi Million Dollar Transactions

Lowenstein Sandler represented Applied Digital Corporation(Nasdaq: APLD), a designer, builder, and operator of next-generation digital infrastructure designed for High-Performance Computing ("HPC") applications, in three significant transactions over the last two weeks, including:

  • $160 Million Strategic Financing

On September 6, we represented Applied Digital in definitive agreements for a $160 million private placement financing, priced at market, from a group of institutional and accredited investors, NVIDIA and Related Companies, the most prominent privately-owned real estate company and leader in complex infrastructure and data center development. This strategic financing underscores Applied Digital's position as a trusted pioneer in the accelerated compute space.

With this added capital, Applied Digital is further strengthening its financial position to bring its transformative data center and GPU cloud solutions to market at scale. These solutions-supported by the company's deep bench of hyperscale talent, specialized access to a robust and immediately available pipeline of stranded power, and use of advanced infrastructure technologies such as closed-loop liquid cooling-are poised to deliver a proprietary, purpose-built, hyper-efficient platform for the world's most advanced HPC and AI workloads. Among these projects are the company's current build-out of one of the world's largest data centers and development of an additional 300MW of data center capacity.

Applied Digital, already a Preferred NVIDIA Cloud Partner, remains on the leading edge of data center and cloud computing advancements.

  • Issuance of $53.2 M Convertible Preferred Stock to Advance HPC Data Center Project

On August 30, Lowenstein represented Applied Digital in a private financing arrangement with a single investor pursuant to which the company issued $53.2 million in convertible preferred stock for net proceeds of $50 million.

Applied Digital plans to use the proceeds from this investment to fund various growth initiatives across its business segments.

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.

  • Committed Equity Facility of up to $250M

On August 30, we also represented Applied Digital Corporation in a committed equity facility of up to $250 million with YA II PN, LTD., a fund managed by Yorkville Advisors Global, LP.

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The deal teams for all transactions included Steven E. Siesser, Brooke A. Gillar, Marianna Shelenkova, Kaitlyn M. Baietto, Donna Calia, and Bonnie Schipper.

Alan J. Sun, Louise Gong, and Emily Jewell assisted on the $160 million private placement.

Kate Basmagian, Sarah Cole, Emily Jewell, and Melissa K. Parres assisted in the issuance of convertible stock.

Kate Basmagian and Sarah Cole assisted on the committed equity facility.

About Lowenstein Sandler LLP
Lowenstein Sandler is a national law firm with over 350 lawyers based in New York, Palo Alto, New Jersey, Utah, and Washington, D.C. The firm represents leaders in virtually every sector of the global economy, with particular emphasis on investment funds, life sciences, and technology. Recognized for its entrepreneurial spirit and high standard of client service, the firm is committed to the interests of its clients, colleagues, and communities.