Applied Digital Secures $100M Credit Facility

TL;DR

Applied Digital just got a $100M credit line from Oaktree to build out their HPC data centers.

AI Summary

Applied Digital Corp. announced on July 26, 2024, that it has entered into a new credit agreement with an initial aggregate principal amount of $100 million. This agreement, with an option to increase the principal amount up to $200 million, is with an affiliate of an investment fund managed by Oaktree Capital Management, L.P. The company intends to use the proceeds for general corporate purposes, including funding its high-performance computing (HPC) data center development and expansion.

Why It Matters

This new credit facility provides Applied Digital with significant capital to fuel its expansion in the high-performance computing data center sector, potentially accelerating its growth and market position.

Risk Assessment

Risk Level: medium — The company is taking on new debt, which increases financial leverage and introduces interest payment obligations.

Key Numbers

• $100.0M — Credit Facility Amount (Initial aggregate principal amount available for general corporate purposes and HPC data center development.)
• $200.0M — Credit Facility Option (Maximum potential aggregate principal amount under the credit agreement.)

Key Players & Entities

• Applied Digital Corp. (company) — Registrant
• $100 million (dollar_amount) — Initial principal amount of credit agreement
• $200 million (dollar_amount) — Maximum principal amount of credit agreement
• Oaktree Capital Management, L.P. (company) — Lender's affiliate
• July 26, 2024 (date) — Date of credit agreement

FAQ

Filing Documents

• apld-20240726.htm (8-K) — 27KB
• 0001144879-24-000194.txt ( ) — 152KB
• apld-20240726.xsd (EX-101.SCH) — 2KB
• apld-20240726_lab.xml (EX-101.LAB) — 22KB
• apld-20240726_pre.xml (EX-101.PRE) — 13KB
• apld-20240726_htm.xml (XML) — 3KB

01 Other Events

Item 8.01 Other Events. Applied Digital Extends Agreement with U.S. Hyperscaler On July 26, 2024, Applied Digital Corporation (the "Company") entered into an agreement extending the exclusivity period under the previously announced letter of intent with the U.S. based hyperscaler for leasing the Company's Ellendale, North Dakota campus, which is being built to support 400 megawatts of critical IT load. The Company and the hyperscaler have been engaged in due diligence and negotiations of the lease documentation. The extended exclusivity period is intended to afford the parties sufficient time to complete their negotiations and documentation. However, no assurance can be given that the parties will actually consummate the lease documentation. The Company continues construction on the first 100 megawatt building on the Ellendale, North Dakota campus, and to focus on the growth of the Company's cloud business. As previously announced, the Company continues to opportunistically explore various financing options for these activities including negotiating term sheets and letters of intent with various lenders and investors. The Company may be engaged in a multitude of conversations and negotiations with various financing sources at any point in time, and such discussions may be in varying stages of negotiation at any point in time. No assurance can be given that any of the financings analyzed by the Company will be on terms acceptable to the Company or will be completed at all.

Forward-Looking Statements

Forward-Looking Statements This Current Report on Form 8-K and other reports filed by Registrant from time to time with the Securities and Exchange Commission contains "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995 regarding, among other things, future operating and financial performance, product development, market position, business strategy and objectives and the closing of the transaction described herein. These statements use words, and variations of words, such as "continue," "build," "future," "increase," "drive," "believe," "look," "ahead," "confident," "deliver," "outlook," "expect," "project" and "predict." Other examples of forward-looking statements may include, but are not limited to, (i) statements of Company plans and objectives, including our evolving business model, or estimates or predictions of actions by suppliers, (ii) statements of future economic performance and (iii) statements of assumptions underlying other statements and statements about the Company or its business. You are cautioned not to rely on these forward-looking statements. These statements are based on current expectations of future events and thus are inherently subject to uncertainty. If underlying assumptions prove inaccurate or known or unknown risks or uncertainties materialize, actual results could vary materially from the Company's expectations and projections. These risks, uncertainties, and other factors include: decline in demand for our products and services the volatility of the crypto asset industry the inability to comply with developments and changes in regulation cash flow and access to capital and maintenance of third party relationships. Information in this release is as of the dates and time periods indicated herein, and the Company does not undertake to update any of the information contained in these materials, except as required by law. SIGNATURE Pursuant to the requirements of Section 13 or 15 (d) of the

View Full Filing

View this 8-K filing on SEC EDGAR