Riley's own efforts to finance its recent acquisition of the holding company Franchise Group, Inc.
However, Applied Digital repaid the total balance of the loan nearly two years ahead of its contractual maturity, a timeframe that corresponded with B. The agreement, the purpose of which Applied Digital claimed was to supply "additional liquidity to fund the buildout of the Company's recently announced AI cloud platform and datacenters by the Company," provided for a term loan in the principal amount of up to $50 million, with an interest rate of 9.00% per annum, and a maturity date of May 23, 2025. Eight days later, on May 23, 2023, Applied Digital entered into a loan and security agreement with B. On May 15, 2023, Applied Digital announced that it was launching cloud service to "mpower rtificial ntelligence pplications". Riley, the prospectus issued in connection with the IPO (the "IPO Prospectus") nonetheless assured investors that Applied Digital had "structured Board composition and corporate governance in order to meet the requirements of the ". Nasdaq Listing Rule 5606(a)(2) defines an independent director as "a person other than an Executive Officer or employee of the Company or any other individual having a relationship which, in the opinion of the Company's board of directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director." Notwithstanding the close ties between Applied Digital and B. Riley Securities.Īs a company publicly traded on the NASDAQ, Applied Digital is required to comply with Listing Rule 5605(b)(2), which states that a majority of the Company's board of directors (the "Board") must be comprised of independent directors. Specifically, at the time of the IPO, Hastings served as the CEO of B. Further, the IPO Prospectus stated that two members of the Board, Chuck Hastings ("Hastings") and Virginia Moore ("Moore"), maintained similarly close connections to B. At the time of the IPO, Cummins also served as the CEO and President of B. Riley Financial, and thereafter became President of B. For example, in the "conflicts of interest" section of the IPO Prospectus, Applied Digital stated that, in August 2021, the Company's Chief Executive Officer ("CEO"), Defendant Wesley Cummins ("Cummins"), sold a majority interest in a registered investment adviser controlled by Cummins to B. The Offering Documents described several close connections between Applied Digital and B.
On April 13, 2022, pursuant to the offering documents issued in connection with the IPO (the "Offering Documents"), Applied Digital's securities began trading on the Nasdaq Global Select Market ("NASDAQ"). Riley Securities"), an investment bank and subsidiary of the diversified financial services platform B.
The primary underwriter of the IPO was B. In April 2022, Applied Digital conducted its initial public offering ("IPO"), issuing 8 million shares of common stock priced at $5.00 per share for a total of approximately $40 million in proceeds. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and the number of shares purchased.Īpplied Digital, originally known as Applied Blockchain, designs, develops, and operates datacenters in North America, and provides artificial intelligence ("AI") cloud services, computing datacenter hosting, and crypto datacenter hosting services. A copy of the Complaint can be obtained at To discuss this action, contact Robert S. If you are a shareholder who purchased or otherwise acquired Applied Digital securities during the Class Period, you have until Octoto ask the Court to appoint you as Lead Plaintiff for the class.
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